• The real secret of Silicon Valley is that it’s really all about the people. Sure, there are plenty of stories in the press about the industry’s young geniuses, but surprisingly few about its management practices. What the mainstream press misses is that Silicon Valley’s success comes from the way its companies build alliances with their employees. Here, talent really is the most valuable resource, and employees are treated accordingly.

    The most successful Silicon Valley businesses succeed because they use the alliance to recruit, manage, and retain an incredibly talented team of entrepreneurial employees.

    — The Alliance: Managing Talent in the Networked Age by Reid Hoffman, Ben Casnocha, et al.

  • In the red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. Here, companies try to outperform their rivals to grab a greater share of existing demand. As the market space gets crowded, prospects for profits and growth are reduced. Products become commodities, and cutthroat competition turns the red ocean bloody.

    Blue oceans, in contrast, are defined by untapped market space, demand creation, and the opportunity for highly profitable growth. Although some blue oceans are created well beyond existing industry boundaries, most are created from within red oceans by expanding existing industry boundaries. In blue oceans, competition is irrelevant because the rules of the game are waiting to be set.

    — Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant by W. Chan Kim, Renee Mauborgne, et al.

  • As anyone who’s launched a product or business under conditions of extreme uncertainty knows, it’s very difficult to make accurate forecasts about markets you’ve never played in before — or that may not even exist yet. Innovation accounting gives entrepreneurs and leaders a language for talking about progress in the years before revenue kicks in. And not only that — it allows you to actually translate your learning into numbers your finance colleagues and investors can understand.

    Having that shared language, and a shared system for showing progress, helps concretize the trust between leaders and entrepreneurial teams. Entrepreneurs and leaders agree to a set of metrics they believe are important to the success of a project. Entrepreneurs must show progress to be able to secure their next round of funding, and leaders agree to continue supporting the project as long as entrepreneurs can demonstrate that their strategy is working — or that they’re making the proper adjustments to their strategy based on their discoveries.

    — The Leader’s Guide by Eric Ries

  • As a good rule of thumb, proprietary technology must be at least 10 times better than its closest substitute in some important dimension to lead to a real monopolistic advantage. Anything less than an order of magnitude better will probably be perceived as a marginal improvement and will be hard to sell, especially in an already crowded market.

    The clearest way to make a 10x improvement is to invent something completely new. If you build something valuable where there was nothing before, the increase in value is theoretically infinite.

    — Zero to One: Notes on Startups, or How to Build the Future by Peter Thiel, Blake Masters

  • If we define the future as a time that looks different from the present, then most people aren’t expecting any future at all; instead, they expect coming decades to bring more globalization, convergence, and sameness.

    In this scenario, poorer countries will catch up to richer countries, and the world as a whole will reach an economic plateau. But even if a truly globalized plateau were possible, could it last? In the best case, economic competition would be more intense than ever before for every single person and firm on the planet. However, when you add competition to consume scarce resources, it’s hard to see how a global plateau could last indefinitely. Without new technology to relieve competitive pressures, stagnation is likely to erupt into conflict. In case of conflict on a global scale, stagnation collapses into extinction.

    That leaves the fourth scenario, in which we create new technology to make a much better future. The most dramatic version of this outcome is called the Singularity, an attempt to name the imagined result of new technologies so powerful as to transcend the current limits of our understanding.

    — Zero to One: Notes on Startups, or How to Build the Future by Peter Thiel, Blake Masters

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