My product management toolkit (27): checklists

If you’d know me personally, you’d know that I love a good list. Making lists helps me to outline my thoughts, see connections and help prioritise. Three years ago, I wrote about “The Checklist Manifesto” by Atuwal Gawande, which is a great book about the importance of checklists and the ingredients of good checklist (see Fig. 1 below).


Fig. 1 – Key learnings from “The Checklist Manifesto” – Taken from:, 1 July 2015:

  1. Why checklists? – As individuals, the volume and complexity of the know-how that we carry around in our heads or (personal) systems is increasingly becoming unmanageable. Gawande points out that it’s becoming very hard for individuals to deliver the benefits of their know-how correctly. We therefore need a strategy for overcoming (human) failure. One the one hand this strategy needs to build on people’s experience and take advantage of their knowledge. On the other hand, however, this strategy needs to take into account human inadequacies. Checklists act as a very useful as part of this strategy.
  2. What makes a good checklist? – Gawande stresses that the checklist can’t be lengthy. A rule of thumb that some people use is to have between 5 to 9 items on a checklist in order to keep things manageable. The book contain some good real-life examples of how people go about starting their checklists. For example, looking at lessons learned from previous projects or the errors known to occur at any point.
  3. How to use a checklist – I believe that the key thing to bear in mind when using checklists is that they aren’t supposed to tell you what to do. As the book explains, a checklist isn’t a magic formula. Instead, having a checklist helps you at every step of the way, making sure you’ve got all the crucial info or data required at each step. Also, a checklist is a critical communication tool, as it outlines who you need to talk to (and why, what about) at each step of the way. Gawande also highlights the value of the ‘discipline’ that comes with having a checklist, the routine that’s involved in having a checklist. I’d add to this that a checklist can be a great way of identifying and mitigating risk upfront.


I’ve since read Leander Kahney’s biography of Jonny Ive, Apple’s design honcho. The book contains a quote about Apple’s New Product Process (‘ANPP’):

“In the world according to Steve Jobs, the ANPP would rapidly evolve into a well-defined process for bringing new products to market by laying out in extreme detail every stage of product development.

Embodied in a program that runs on the company’s internal network, the ANPP resembled a giant checklist. It detailed exactly what everyone was to do at every stage for every product, with instructions for every department ranging from hardware to software, and on to operations, finance, marketing, even the support teams that troubleshoot and repair the product after it goes to market.”

I perked up when I read how the ANPP resembles “a giant checklist”, detailing what needs to happen at each stage of the product development process. Apple’s process entails all stages, from concept to market launch. The ANPP is understandably very secretive, but I believe that we don’t need to know the ins and outs of Apple’s product development process to look at the use of checklists when developing and managing products:

Checklists aren’t the same as Gantt Charts! – It’s easy to confuse a short checklist with a Gantt Chart. Over the years, I’ve observed how people can derive a lot of certainty from creating and viewing detailed Gantt Charts or roadmaps (see my previous thoughts on this topic here). In my view, a super detailed checklist defeats the object. Instead, I encourage you to have short checklists that highlight both basic and critical steps to go through when developing / launching / managing products.

Checklists are evolving – Checklists are evolving in a sense that they’re likely to be different per product / team / project / etc. I find, for example, that each time I work with a new team of people or on new product, the checklist reflects the specific steps that need be checked, tailored to the team’s way of working or the specific product at hand.

Checklists are a collective effort – I’m currently onboarding a new UX designer into my team, and he’s keen for us to look at the ‘design checklist’ together, as he’s got some suggestions on how to make it work better. This might mean that the existing design checklist (see Fig. 2 below), underpinned by my preferred dual track approach, might be binned or adapted accordingly. Both are fine, as I expects checklists to be formed by those people who are responsible for checking the different list items. I’ve seen people treat their individually developed checklists as a decree … which others had to following blindly. My simple reaction to that kind of approach: no, no, no, no.


Fig. 2 – Sample ”design checklist”:

Democratise the sign-off process (1) – Often, quality assurance people come up and drive the best checklists. However, the risk I’ve observed, is that these QAs or the product managers become the single sign-off point for the checklist in question. I go into companies and look at their SCRUM and Kanban boards which have cards stating “Pet sign-off” or “Jackie sign-off”. I recently spoke to product managers at a company where the CEO wanted to sign off each feature.

Democratise the sign-off process (2) -Whilst nothing seems wrong with this approach at the face of it, there are two reasons why I feel uncomfortable with this ‘single sign-off’ approach. Firstly, to me, a hallmark of a truly self-organising and empowered team is that everyone feels empowered to ‘sign off’ on the end result (and its individual components). Secondly, I’m also worried about what happens if the designated sign-off person isn’t available. What happens if Pete and Christina are off ill or in never ending meetings? What if the CEO isn’t available for sign-off? Does the feature or product not get released to market? In short, I’m worried about creating another bottleneck or ‘single point of failure’ or forfeiting speed to market.

Don’t forget the basic steps – How often have you’ve been in a situation where you’ve just launched a new product or feature and realised that you forgot to test the styling of the images, content and calls to action? Sense checking things like these sounds like a basic step, but it’s one that’s easily forgotten in the excitement (and haste) to launch. Having basic steps like ‘check content’ included in your ‘pre-launch checklist’ will make sure that things don’t get overlooked (see Fig. 3 below).


Fig. 3 – Sample ”hygiene checklist”:


Include critical steps, lessons learned – I’ve found checklist to be a good way to incorporate key lessons learned on a continuous basis. The risks with post-mortem sessions or retrospectives is that lessons learned don’t get action and tend to be forgotten. Including a learning into a checklist is a simple but effective of way of ensuring that a learning sticks. For example, “training the customer support team” (on a new product, user flow or feature) was a critical step that I used to forget consistently. By including this item in a ‘go-to-market checklist’ helped me and my team in making sure this step wouldn’t be forgotten about anymore.

Put your checklist on a wall – Finally, I’d recommend making your checklist as visible and shareable as possible. You can stick your checklist on an office wall or, if the team aren’t all working in the same space, in collaboration software products like Confluence and Trello (see Fig. 4 – 5 below).


Fig. 4 – Put your checklist on a wall – Taken from:



Fig. 5 – Add your checklist in Trello – Taken from:



Main learning point: As long as you don’t confuse them with highly detailed project plans or roadmaps, roadmaps can be a valuable tool in making sure you and your team don’t overlook key steps when developing products!


Related links for further learning:


Book review: “The No Asshole Rule”

Do you consider yourself an asshole at times? Can you pinpoint moments where you felt – in retrospect – where you acted like an asshole? Apologies for the profuse use of the word “asshole”, I blame it on a great book I read recently: “The No Asshole Rule” by Bob Sutton. First published in 2007, Sutton describes what makes an asshole and offers tips on how to stop yourself from acting like one!

These are the main things I took away from reading “The No Asshole” book:

  1. What makes an asshole? – Sutton refers to a valuation by Bennett Tepper who studied psychological abuse in the workplace and introduced a useful definition for asshole behaviour: “the sustained display of hostile verbal and non verbal behaviour, excluding physical contact.”
  2. Do the asshole test – In the book, Sutton suggests two ways to test whether there’s an asshole at play or not. Firstly, after talking to the alleged asshole, does the ‘target’ feel oppressed, humiliated, de-energised, or belittled by the person. In other words, does the target feel worse about him or herself as a result? Secondly, does the alleged asshole aim his or her venom at people who are less powerful rather than at people who are more powerful?
  3. “Handle with care!?” – I like how Sutton cites research which shows how constructive arguments over ideas – NOT nasty personal arguments – drives greater performance. In order words, interacting effectively with others doesn’t mean that you’re not allowed to have a constructive debate or pose a constructive challenge. Harvard Business School professor Amy Edmondson talks a lot about how to best create psychologically work space. A strong sense of fear among employees or people feeling uncomfortable to speak up (especially with more senior people) can be signs of work spaces which don’t feel fully safe to the people that work in them.
  4. What to do when facing an asshole? “Small wins” – Research has shown that a feeling of control – even over the smallest aspect of your fate – can have a big impact on your wellbeing. Psychologist Karl Weick contends that aiming for ‘small wins’ is often a more comforting and ultimately more effective strategy than aiming for ‘big wins’. In the case of being exposed to assholes, Sutton suggests looking at small ways to reduce the interaction with assholes or other wise to seize a sense of control.

Main learning point: “Assholes are us” is one of the closing comments in Sutton’s book. If you want to create an asshole-free environment, you need start with having a long, hard look at yourself. A good friend of mine once encouraged me to think “how is that true of me?” every time I’d judge someone else or their behaviour. It means being able to stop your ‘inner asshole’ from coming out or you avoiding working at places with lots of assholes 🙂


Fig. 1 – “The Dirty Dozen – Common Everyday Actions That Assholes Use” – Taken from: Bob Sutton, “The No Asshole Rule”, p. 10

  1. Personal insults
  2. Invading one’s ‘personal territory’
  3. Uninvited physical contact
  4. Threats and intimidation, both verbal and non verbal
  5. ‘Sarcastic jokes’ and ‘teasing’ used as insult delivery systems
  6. Withering email flames
  7. Status slaps intended to humiliate their victims
  8. Public shaming or ‘status degradation’ rituals
  9. Rude interruptions
  10. Two-faced attacks
  11. Dirty looks
  12. Treating people as if they are invisible

Fig. 2 – What’s your Total Cost of Assholes to Your Organisation; factors to consider when calculating the total cost of assholes to your organisation – Examples taken from: Bob Sutton, “The No Asshole Rule”, pp. 44-46

  • Damage to victims and witnesses – For example: distraction from tasks; reduced psychological safety and climate of fear and loss of motivation;
  • Woes of certified assholes – Victims and witnesses hesitating to help; retaliation from victims and witnesses and long term career damage.
  • Wicked consequences for management – Time spent appeasing, calming, counselling or disciplining assholes; time spent ‘cooling out’ employees who are victimised and managing burnout.
  • Legal and HR management costs – Anger management and other training to reform assholes; legal costs for inside and outside counsel and health-insurance costs.
  • When assholes reign: negative effectives on organisations – Reduced innovation and creativity; reduced ‘discretionary’ effort and and dysfunctional internal cooperation.


Related links for further learning:


App review: Blinkist

The main driver for this app review of Blinkist is simple: I heard a fellow product manager talking about it and was intrigued (mostly by the name, I must add).

My quick summary of Blinkist (before using it) – “Big ideas in small packages” is what I read when I Google for Blinkist. I expect an app which provides me with executive type summaries of book and talks, effectively reducing them to bitesize ideas and talking points.

How does Blinkist explain itself in the first minute? – When I go into Apple’s app store and search for Blinkist, I see a strapline which reads “Big ideas from 2,000+ nonfiction books” and “Listen or read in just 15 minutes”. There’s also a mention of “Always learning” which sounds good …



Getting started, what’s the process like? (1) – I like how Blinkist lets me swipe across a few screens before deciding whether to click on the “Get started” button. The screens use Cal Newport’s “Deep Work” book as an explain to demonstrate the summary Blinkist offers of the book, the 15 minute extract to read or listen to, and how one can highlight relevant bits of the extract. These sample screens give me a much better idea of what Blinkist is about, before I decide whether to sign up or not.



Getting started, what’s the process like? (2) – I use Facebook account to sign up. After I clicked on “Connect with Facebook” and providing authorisation, I land on this screen which mentions “£59.99 / year*”, followed by a whole lot of small print. Hold on a minute! I’m not sure I want to commit for a whole year, I haven’t used Blinkist’s service yet! Instead, I decide to go for the “Subscribe & try 7 days for free” option at the bottom of the screen.


Despite my not wanting to pay for the Blinkist service at this stage, I’m nevertheless being presented with an App Store screen which asks me to confirm payment. No way! I simply get rid  of this screen and land on a – much friendlier – “Discover” screen.



To start building up my own library I need to go into the “Discover” section and pick a title. However, when I select “Getting Things Done” which is suggested to me in the Discover section, I need to unlock this first by start a free 7-day trial. I don’t want to this at this stage! I just want to get a feel for the content and for what Blinkist has to offer, and how I can best get value out of its service. I decide to not sign up at this stage and leave things here … Instead of letting me build up my library, invest in Blinkist and its content and I only then making me ‘commit’, Blinkist has gone for a free trial and subscription model instead. This is absolutely fine, but doesn’t work for me unfortunately, as I just want to learn more before leaving my email address, committing to payment, etc.



Did Blinkist deliver on my expectations? – Disappointed.




My product management toolkit (26): PAUSE and LISTEN

If there are two things I can definitely improve, I’d say it would be my ability to “pause” and “listen”. Too often, I’ve made the mistake of not listening to what the other person is saying. Instead, I’m thinking of what to say myself or making assumptions, completely ‘steamrolling’ the other person in the process …


Looking back, I guess my inability to listen was closely linked to my focus on products over people. This focus effectively meant that I cared more about products, and less about building relationships with people. For example, I felt at times that internal stakeholders were more of a necessary evil whose sole purpose was to hinder product development. Fortunately, I no longer adhere to this point of view and I’ve come to realise how critical collaboration is to building great products.

I had to think back to this transition when I recently read “Practical Empathy”, which Indi Young, an independent UX consultant, published in 2015. In this great book, Young explains that empathy is all about understanding what’s going on in other people’s minds. She describes “listening” as a vital tool to create a deeper understanding and talks about “a new way to listen”:

  • Listen for reasoning (inner thinking) – What is going through someone else’s mind?
  • Listen for reactions  Reactions often go hand in hand with reasoning. For instance, I could express an emotional response when I describe why I decided to make a career change.
  • Listen for guiding principles – A guiding principle is a philosophy or belief that someone uses to decide what action to take, what to choose, how to act, etc.

I found that for people like me – i.e. with lots of opinions, thoughts, ideas and assumptions – listening can be incredibly difficult. In the Netherlands where I was born, voicing your opinion and standing up for oneself are considered highly regarded attributes. I’ve had to learn – and am still learning – to “pause” a lot more. Instead of jumping to conclusions or simply getting my two cents in, I’ve learned to breathe and pause first before deciding to say something or to simply listen. I’m trying to remind myself continuously that each I forget to listen, I forfeit the opportunity to understand what’s driving the other person.

Let me share a real life example with you, to illustrate how listening can help to develop a better understanding of where the other person is coming from:


A while ago, I was talking about team performance with an engineer and he mentioned that “we have to be careful, because most engineers are delicate beings”.

Me – before understanding a single thing about listening and empathy

With a comment like the engineer had made, I’d have jumped straight in there and would have said: “what are you talking about! Surely, not all developers are delicate human beings! I’ve worked with some developers who made me look like a wallflower!” and so on and so forth.

Me – with the beginnings of an understanding about listening and empathy

In this real life example, I didn’t respond at all. I paused and listened. By allowing the engineer speak, I started to understand that he cared deeply about the developers in the team and considered himself as their mentor, wanting to make sure they fully enjoyed their day job.

The moral of this story is that listening starts with taking that split second to stop that innate desire to respond immediately. I learned a lot about listening from reading and practising the insights from “Active Listening”, another valuable book. In this book by Josh Gibson and Fynn Walker, they describe the four components of active listening:

  1. Acceptance – Acceptance is about respecting the person that you’re talking to; irrespective of what the other person has to say but purely because you’re talking to another human being. Accepting means trying to avoid expressing agreement or disagreement with what the other person is saying, at least initially. I’ve often made this mistake; being too keen to express my views and thus encouraging the speaker to take a very defensive stance in the conversation.
  2. Honesty – Honesty comes down to being open about your reactions to what you’ve heard. Similar to the acceptance component, honest reactions given too soon can easily stifle further explanation on the part of the speaker.
  3. Empathy – Empathy is about your ability to understand the speaker’s situation on an emotional level, based on your own view. Basing your understanding on your own view instead of on a sense of what should be felt, creates empathy instead of sympathy. Empathy can also be defined as your desire to feel the speaker’s emotions, regardless of your own experience.
  4. Specifics – Specifics refers to the need to deal in details rather than generalities. The point here is that for communication to be worthwhile, you should ask the speaker to be more specific, encouraging the speaker to open up more or “own” the problem that they’re trying to raise.

The thing with empathy, as Young points out in her book, is that it isn’t about having to feel warmth for the other person or fully agree with him / her. In contrast, empathy means understanding and comprehending the other person. It takes time and skill to be able to drop in to a neutral frame of mind to:

  • Resist the urge to demonstrate how smart you are – Well known technology exec and investor Bill Krause used to write down “DNT” in his notepad during meetings. “DNT” stood for “Do Not Talk”, and he used it as a practical tool to stop himself from saying something or showing how smart he was. Young also provides some good tips on how to stop yourself from talking or saying too much (see Fig. 2 below).
  • Develop the knowledge to gain empathy – In “Practical Empathy”, Young suggests a few simple questions that can help you build a better understanding of the other person’s deeper reasoning and principles. Readers are encouraged to use the fewest number of words possible when asking question (see Fig. 1 below).
  • Apply empathy to both customers and colleagues – UX expert Erika Hall recently made a great point about the importance of applying empathy to co-workers (listen to the Aurelius podcast here for the interview with Erika). Again, I used to make the mistake of solely applying customer empathy but not paying enough attention or respect to colleagues. Showing empathy towards can be as simple as understanding about someone’s else workload or OKRs.

Main learning point: Empathy – both inward and outward – is SO SO important. Pausing and listening are your first tools on the path towards developing empathy. Yes, I look back on mistakes made and people that I’ve upset in the past due to a lack of empathy, but I feel that I’ve learned a lot since then (whilst I appreciate I still have got a long way to go). If you want to get started on developing and showing more empathy, I’d highly recommend reading “Practical Empathy” by Indi Young and “Active Listening” by Josh Gibson and Fynn Walker.


Fig. 1 – Use the fewest number of words possible – Taken from: Indi Young – Practical Empathy, p. 60

  • “Why’s that?”
  • “What were you thinking?”
  • “What’s your reasoning?”
  • Tell me more about <her phrase>.”
  • “Because?”

Fig. 2 – Summary of “a new way to listen” – Taken from: Indi Young – Practical Empathy, p. 77

What to listen for:

Reasoning: Thinking, decision-making, motivations, thought processes, rationalisation.

Reaction: Responses to something – mostly emotional, some behavioural.

Guiding Principle: Belief that guides decisions.

Follow the peaks and valleys:

  • Started with a broad topic
  • Let the speaker keep choosing the direction
  • Dig into the last few remarks
  • Use the fewest number of words possible
  • Reiterate a topic to show attention, verify your understanding and ask for more
  • Avoid introducing words the speaker hasn’t used
  • Try not to say “I”

Be supportive:

  • Don’t fake it – react, be present
  • Never switch abruptly
  • Adapt yourself to the mood
  • Don’t cause doubt or worry

Be respectful:

  • Be the undermind, not the overmind
  • Resist the urge to demonstrate how smart you are
  • Avoid implying or telling the speaker she is wrong

Neutralise your reactions:

  • Learn how to notice your emotional reactions
  • Dissipate your reactions and judgments



App review: Steemit is one of those products that feels super complex at first sight. I think it’s content platform but I need to give it a much closer look in order to understand how Steemit works:

My quick summary of Steemit (before using it): I reckon Steemit is a content creation and sharing platform, but I’m not sure what technology it’s built on or how it works.

How does the app explain itself in the first minute? “Your voice is worth something” is the first thing I see. When I continue reading above the fold, it says “Get paid for good content. Post and upvote articles on Steemit to get your share of the daily rewards pool.”

Getting started, what’s the process like (1)? The first thing I do is clicking on the “Learn more” button on the Steemit homepage. I then land on a useful FAQ page which covers the typical questions and answers you’d expect. Steemit enables “the crowd to reward the crowd for their content.” The platform is connected with the Steem blockchain, which is decentralised and open. Content contributors to Steemit are rewarded with STEEM, dependent on the attention their content is getting from other Steemit users.

Getting started, what’s the process like (2)? Signing up is very straightforward, nothing out of the ordinary. A nice progress bar, two-factor authentication and I now have to wait for Steemit to validate my sign-up request.

What can I do in the meantime? – I have a little nose around the Steemit platform, to learn about the content people publish. For example, I came across Dan Dicks, who has posted 71 posted on Steemed and has (sofar) received $123.86 for his latest post.


Main learning point: Steemit feels very similar to Quora and Reddit, but the main difference being the underlying blockchain and cryptocurrency element. Once my signup request has been approved, I’ll no doubt get a better sense of how the platform actually works. Currently, I’m not entirely clear on the dynamics in terms of being rewarded for your Steemit content.

Related links for further learning:


My product management toolkit (25): understanding the “unit economics” of your product

As a product manager it’s important to understand the unit economics of your product, irrespective of whether you’re managing a physical or a digital product. Unit economics are the direct revenues and costs related to a specific business model expressed on a per unit basis. These revenues and costs are the levers that impact the overall financial success of a product. In my view there are a number of reasons why I feel it’s important for product managers to have a good grasp of the unit economics of your product:

  • Helps quantify the value of what we do – Ultimately, product success can be measured in hard metrics such as revenue and profit. Even in cases where our products don’t directly attribute to revenue, they will at least have an impact on operational cost.
  • Customer Value = Business Value – In an ideal world, there’s a perfect equilibrium between customer value and business value. If the customer is happy with your product, buys and uses it, this should result in tangible business value.
  • P&L accountability for product people (1) – Perhaps it’s to do with the fact that product management still is a relatively young discipline, but I’m nevertheless surprised by the limited number of pr0duct people I know who’ve got full P&L responsibility. I believe that having ownership over the profit & loss account helps product decision making and and accountability, not just for product managers but for the product teams that we’re part of.
  • P&L accountability for product people (2) – Understandably, this can be a scary prospect and might impact the ways in which we manage products. However, owning the P&L will (1) make product managers fully accountable for product performance (2) provide clarity and accountability for product decisions, (3) help investments in the product and product marketing and (4) steep product management in data, moving to a more data informed approach to product management.
  • Assessing opportunities based on economics – Let’s move away from assessing new business or product opportunities purely based on “gut feel”. I appreciate that at some point we have to take a leap, especially with new products or problems that haven’t been solved before. At the same time, I do believe it’s critical to use data to help inform your opportunity assessments. Tools like Ash Maurya’s Lean Canvas help to think through and communicate the economics of certain opportunities (see Fig. 1 below). In the “cost structure” part of the lean canvas, for example, you can outline the expected acquisition or distribution cost of a new product.
  • Speaking the same language – It definitely helps the collaboration with stakeholders, the board and investors if you can speak about the unit economics of your product. I know from experience that being able to talk sensibly about unit economics and gross profit, really helps the conversation.

Now that we’ve established the importance of understanding unit economics, let’s look at some of the key components of unit economics  in more detail:

Profit margin per unit = (sales price) – (cost of goods sold + manufacture cost + packaging cost + postage cost + sales cost)

Naturally the exact cost per unit will be dependent on things such as (1) product type (2) point of sale (3) delivery fees and (4) any other ‘cost inputs’.

In a digital context, the user is often the unit. For example, the Lifetime Value (‘LTV’) and Customer Acquisition Cost (‘CAC’) are core metrics for most direct to consumer (B2C) digital products and services. I learned from David Skok and Dave Kellogg about the importance of the ‘CAC to LTV’ ratio.

Granted, Skok and Kellogg apply this ratio to SaaS, but I believe customer acquisition cost (‘CAC’) and customer lifetime value (‘LTV’) are core metrics when you treat the user as a unit; you’ve got a sustainable business model if LTV (significantly) exceeds CAC. In an ideal world, for every £1 it costs to acquire a customer you want to get £3 back in terms of customer lifetime value. Consequently, the LTV:CAC ratio = 3:1.

I’ve seen companies start with high CAC in order to build scale and then lower the CAC as the business matures and relies more on word of mouth as well as higher LTV. Also, companies like Salesforce are well known for carefully designing additions (“editions”) to increase customer lifetime value (see Fig. 2 below). 

Netflix are another good example in this respect, with their long term LTV view of their customers. Netflix take into account the Netflix subscription model and a viable replacement for another subscription model in cable. The average LTV of Netflix customers is 25 months. As a result, Netflix are happy to initially ‘lose’ money on acquiring customers, through a 1-month free trial, as these costs costs will be recouped very soon after acquiring the customer.

Main learning point: You don’t need to be a financial expert to understand the unit economics of your products. Just knowing what the ‘levers’ are that impact your product, will put you in good stead when it comes to making product decisions and collaborating with stakeholders.


 Fig. 1 – Lean Canvas template by Ash Maurya – Taken from:


Fig. 2 – Pricing and functionality overview for Salesforce’s New Sales Cloud Lightning Editions:


Related links for further learning:


Book review: “Zero to One”

Whatever you think of Peter Thiel, he’s got a lot of ‘street cred’ in the world of technology and venture capital. We all know how he founded PayPal and turned it into a billion dollar company. As a tech investor, Thiel is widely known for being an early investor in the likes of Facebook and LinkedIn. Listening to a recent interview between Thiel and Reid Hoffman on the latter’s podcast inspired me to read Thiel’s “Zero to One: Notes on Startups or How To Build the Future”. Thiel published “Zero to One” in 2014, based on a course about startups that he taught at Stanford previously.

Truth be told, some of Thiel’s views and concepts in “Zero to One” didn’t resonate with me, mostly because I struggled to convert them into action points I can apply to my own situation (read: working at a successful but early stage startup, and being based in London and not in Silicon Valley). Perhaps that’s exactly the point of Thiel’s book; to provide readers with a wide range of views, some more visionary and though provoking than others, and leaving it with readers to ‘pick and mix’ as they see fit. Consequently, these are the main learning points that I took away from reading “Zero to One”:

  1. Forget about being the first mover, be the last mover instead (1) – In strategy terms, people often talk about the benefits of being a “first mover”; a company’s ability to have a head start over its competitors as a result of being first to market in a new product category. The Hoover vacuum cleaner or Apple’s iPad are good examples of products which opened up a whole new product category and therefore did enjoy (durable) first mover advantage. Thiel, however, flips this by arguing the benefits of being a last mover.
  2. Forget about being the first mover, be the last mover instead (2) – Thiel argues that “moving first is a tactic, not a goal.” He stresses that the point of any business is to generate future cash flows, so being the first mover doesn’t do you any good if someone else comes along and unseats you. Video streaming app Meerkat is a good example of a product which was first to market, but got quickly overtaken by late(r) entrants Periscope and Facebook Live. Thiel explains “It’s much better to be the last mover – that is, to make the last great development in  a specific market and enjoy years or even decades of monopoly profits.” He advises that in order to get to such a position, companies need to dominate a small niche and scale up from there, constantly moving toward their long-term vision.
  3. The value of long term planning – I really like Thiel’s point about “lean” being a methodology, not a goal in it’s own right. As much as I see the value and importance of learning early and often, I do agree with Thiel’s opinion s about the pointlessness of iterating just for the sake of it. What’s the point of a Minimum Viable Product if you aren’t going to learn from it and iterate accordingly? What’s the value of just releasing ‘stuff’ without reflecting on whether a release got you a step closer to achieving your overall vision and commercial success? Thiel describes how successful companies like Apple and Facebook used long-term planning and business planning to get a position of durable market success.
  4. What to do with the “Power Law”? (1) – Thiel gives readers a good insight into the workings of venture capital (‘VC’) companies when he discusses the “power law”. The power law is based on the Pareto Principle. You might have come across this principle in the form of the 80/20 rule; explaining the unequal relationship between inputs and outputs, with 20% of invested input being responsible for 80% of results obtained. Thiel explains that this uneven pattern exists just as much in the VC world: “The biggest secret in venture capital is that the best investment in a successful fund equals or outperforms the entire rest of of the fund combined.” To optimise for the power law, Thiel recommends focusing on one market, one distribution strategy and, as a consequence, to be cautious about diversification.
  5. What to do with the “Power Law”? (2) – For me, the most valuable bit of “Zero to One” is the part where Thiel covers how to best use the power law when making critical business and product decisions. Going over his questions, I learned the importance of being pretty single minded about your unique proposition and execution (see Fig. 1 below). Thiel’s thinking about these questions is pretty simple: “Whatever your industry, any great business plan must address each every one of them. If you don’t have good answers to these questions, you’ll run into lots of “bad luck” and your business will fail. If you nail all seven you’ll master fortune and succeed.”

Fig. 1 – “Seven questions that every business must answer” – Taken from: Peter Thiel, “Zero to One”, pp. 153-154

  1. The Engineering Question – Can you create breakthrough technology instead of incremental improvements?
  2. The Timing Question – Is now the right time to start your particular business?
  3. The Monopoly Question – Are you starting with a big share of a small market?
  4. The People Question – Do you have the right team?
  5. The Distribution Question – Do you have a way to not just create but deliver your product?
  6. The Durability Question – Will your market position be defensible 10 and 20 years into the future?
  7. The Secret Question – Have you identified a unique opportunity that others don’t see?

Main learning point: You can tell that “Zero to One” is written by someone who’s ‘been there and done that’. Thiel speaks with authority about the need to focus on a single market and busts commonplace myths about ‘lean’, first mover advantage and diversification.

Related links for further learning: