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“Competition Is for Losers”

That’s the title of an excerpt from Peter Thiel’s 2014 book Zero to One. In the excerpt, Thiel explains: “Creating value isn't enough—you also need to capture some of the value you create. This means that even very big businesses can be bad businesses. For example, U.S. airline companies serve millions of passengers and create hundreds of billions of dollars of value each year.”

Yet, airlines are a notoriously low or no profit business. This reminds me of the famous Richard Branson quote about how to become a millionaire. The paraphrased version goes: “If you want to be a millionaire, start with a billion dollars and launch a new airline.”

It’s a great exercise to not only consider how your business creates value, but how it captures part of the value it creates. Thiel sums up his point this way: “The lesson for entrepreneurs is clear: If you want to create and capture lasting value, don't build an undifferentiated commodity business.”


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