“EVERY MOMENT IN BUSINESS happens only once. The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. And the next Mark Zuckerberg won’t create a social network. If you are copying these guys, you aren’t learning from them.”
― Peter Thiel, Zero to One
This week, as I revisited Peter Thiel's iconic book "Zero to One" for the third time, I found myself contemplating a different approach to discussing this modern classic. It was also triggered by the feedback I received from some of you regarding my previous piece, "A Tale of Swiss Banks." You appreciated the content but desired a more byte-sized experience. With that in mind, I decided to focus on a single, transformative concept from "Zero to One" - the vertical leap from nothing to something - and examine its embodiment in the story of OpenAI.
Why OpenAI?
At the intersection of cult status and explosive growth, OpenAI stands as an ideal subject for this exploration. With whispers of a trillion-dollar valuation on the horizon, this enigmatic company captures the spirit of Thiel's vertical progress, making it the perfect case study for our journey.
A Case for Vertical Progress
“If I had asked people what they wanted, they would have said faster horses.” - Henry Ford
Imagine the year 2100. What do you see? Chances are, your mind conjures up futuristic versions of the familiar - flying cars, self-driving vehicles, or perhaps a Blade Runner-esque cityscape. It's only natural that we envision a world filled with enhanced iterations of existing products and services. This kind of thinking reflects horizontal progress, where ideas and technologies are incrementally improved upon, making them faster, cheaper, or more convenient. However, this approach does little to fundamentally change the underlying technology or business model.
In contrast, vertical progress embodies the creation of something entirely new, disrupting the status quo and giving birth to new industries or markets. This form of innovation requires taking a novel approach to problem-solving, crafting groundbreaking technologies, or applying existing technologies in unique ways. Examples of vertical progress include the invention of the automobile, the development of the internet, and the emergence of social media platforms.
But let's do one additional thing before we go further - travel back in time and examine how people from the 19th century might have envisioned the year 2000. Here’s a fascinating collection of illustrations, and I especially like this drawing:
The artist behind it needs to be congratulated, for this is where Elon Musk apparently got the idea for NeuraLink from 😉 (a good example of Vertical Progress). However, upon closer inspection of the image, it becomes clear a digital future for books could not be fathomed in 19th century. One can only assume that those (hardbound, no less) books had to be destroyed in order to be converted into electrical pulses that could feed the students brain. I’m sure that the artist hated school and would have be a very disappointed person in 2000.
The crux of Thiel's idea of going from zero to one lies in this contrast between horizontal and vertical progress. While horizontal progress plays out along the x-axis, moving from 1 to 2 to 3 and so on, vertical progress leaps from nothing to something – from 0 to 1.
The iPhone's Game-Changing Journey from Zero to One
“All failed companies are the same: they failed to escape competition.”
― Peter Thiel, Zero to One
Picture this: Steve Jobs unveiling the iPhone in 2007, a pivotal moment where he demonstrated the iPhone's groundbreaking departure from the likes of Motorola and Nokia.
(note: The yellow arrows and text are of my own)
While these competitors were entrenched in the pursuit of horizontal progress, Apple's iPhone leaped into the realm of vertical progress - a true zero to one transformation.
The iPhone's introduction reverberated throughout the industry, leaving an indelible mark on both Apple and its competitors. Apple metamorphosed from a computer manufacturer into a titan of the smartphone industry, achieving unprecedented revenue growth and solidifying its status as a true innovator. The iPhone's impact extended far beyond the device itself, giving birth to an entirely new ecosystem centered around Apple's App Store. This revolutionary platform empowered third-party developers to create a diverse array of applications, further amplifying the iPhone's allure to consumers (and giving birth to Apple’s famous “ecosystem”).
For those unable or unwilling to adapt, the iPhone's ascendance proved fatal. Once-dominant players like Nokia and BlackBerry found themselves crushed beneath the weight of Apple's innovation.
The Zero to One of OpenAI
“Most of a tech company’s value will come at least 10 to 15 years in the future.”
― Peter Thiel, Zero to One
In contrast to the theatrical flair of Steve Jobs, Sam Altman's unveiling of GPT-3 may have been a subtler affair, but its implications were no less earth-shattering. In a AI world governed by incremental improvements, OpenAI leaped past its competition, capturing the imaginations of millions and cementing its position as the torchbearer of AI innovation.
GPT-3's meteoric rise to one million users within a mere five days and its staggering 100 million monthly active users just two months later (outpacing its closest competitor, TikTok, which took nine months to achieve the same milestone) epitomized the concept of going from zero to one.
While it's true that GPT-3 was preceded by GPT-2 in 2019, the point remains that there is no other competitor on the market offering anything remotely similar to ChatGPT. This true blue AGI application captivated the masses, so much so that users were willing to overlook its occasional factual errors, or AI hallucinations ( What’s AI Hallucination? Large Language Models have a propensity to just make things up. There are many reasons to it such as biases in data, or not being trained on a specific type of text like legal or financial. )
When Google unveiled Bard, their ChatGPT competitor, it was met with skepticism and even outright dismissal, as ChatGPT had already captured the hearts and minds of the public. A single mistake during Bard's demo led to a staggering $100 billion drop in Alphabet's market share.
In stark contrast, the demo of Bing Chat, powered by ChatGPT, weathered its many errors without causing Microsoft's stock to plummet. The world remains bullish on ChatGPT, and it appears the AI platform can do no wrong. With OpenAI and Microsoft integrating ChatGPT into their ecosystem (remember the Apple Ecosystem from the story above) - from Office365 to Github Copilot, and ChatGPT Plugins and APIs - the platform's influence continues to grow.
In essence, the zero-to-one leap has transformed ChatGPT and OpenAI into a brand to be reckoned with, one that even Google must work harder to challenge.
The Elusive Art of Going from Zero to One
"The secret to creativity is knowing how to hide your sources." - Albert Einstein
Now, I can almost hear you asking: Crafting such remarkable innovations sounds extraordinary, but it surely can't be easy, right? And if you're expecting me to serve up a ready-made idea for achieving the next zero-to-one leap, I must confess that I don't have one at my fingertips. If I did, I'd likely be out there making it happen myself.😉
However, Peter Thiel, the mastermind behind wildly successful startups like PayPal and Palantir, does offer some tantalizing hints at the formula behind this elusive art. Stay tuned for the next installment, as we embark on this journey to uncover the art of crafting groundbreaking innovations.
Enjoyed the fresh approach? Or prefer the classic book summaries, like Wanting? Share your thoughts in a comment. If it resonates, don't forget to like, share, and subscribe.
I definitely prefer these shorter entries! I can fit a read in one sitting and let my mind ponder on the topic until the next installment ☺️👍🏼
I also read Zero to One and it is an amazing book, no question about it. But it is also a bit dangerous one, especially if you want to do something yourself.
The more I think about it, the more I feel that many of the greatest companies in this world were started by people just trying stuff, without having this great "leap" idea at the beginning.
For example, Zuckerberg did not want to build an ad machine. Airbnb just wanted to rent out one room. Bezos wanted to sell books. Google wanted to do search differently.
Not really sure how to place OpenAI, but possibly they just went with "let's do some stuff on this LLM." :)
What I am trying to say is that you just need to start something and then something can come out of it and not being paralysed by thinking you need something as amazing as Thiel is suggesting. With hindsight many of the ideas then become 0-1 leaps, but they were probably not intended so at the beginning.
Ah, now I think I need to write about it myself as well! :)