The entrepreneurs who stuck with Silicon Valley learned four big lessons from the dot-com crash
that still guide business thinking today:
1. Make incremental advances
Grand visions inflated the bubble, so they should not be indulged. Anyone who claims to be able
to do something great is suspect, and anyone who wants to change the world should be more
humble. Small, incremental steps are the only safe path forward.
2. Stay lean and flexible
All companies must be “lean,” which is code for “unplanned.” You should not know what your
business will do; planning is arrogant and inflexible. Instead you should try things out, “iterate,”
and treat entrepreneurship as agnostic experimentation.
3. Improve on the competition
Don’t try to create a new market prematurely. The only way to know you have a real business is
to start with an already existing customer, so you should build your company by improving on
recognizable products already offered by successful competitors.
4. Focus on product, not sales
If your product requires advertising or salespeople to sell it, it’s not good enough: technology is
primarily about product development, not distribution. Bubble-era advertising was obviously
wasteful, so the only sustainable growth is viral growth.

These lessons have become dogma in the startup world; those who would ignore them are
presumed to invite the justified doom visited upon technology in the great crash of 2000. And yet the
opposite principles are probably more correct:

1. It is better to risk boldness than triviality.
2. A bad plan is better than no plan.
3. Competitive markets destroy profits.
4. Sales matters just as much as product.


Zero to One – Peter Thiel