Peter Thiel’s Lessons for Green Firms


There is a lot of good advice from Peter Thiel in Zero to One. I recommend reading it.

Every environmentalist should read chapter 13, ‘Seeing Green’. It gives some great advice on what it will take make clean technology successful. He also explains why too many green firms flop.


7 Basic Questions To Answer

Thiel writes: “Most clean tech companies crashed because they neglected one or more basic questions that every business must answer:


  1. The Engineering Question. Can you create breakthrough technology instead of incremental improvements?
  2. The Timing Question. Is now the right time to start you 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 by defensible 10 and 20 years into the future?
  7. The Secret Question. Have you identified a unique opportunity that others don’t see?

You must be 10x Better than the alternative

I was struck by an observation he made to the first threshold, the engineering question. He writes “A great technology company should have a proprietary technology an order of magnitude better than its nearest substitute … Companies must strives for 10x better because merely incremental improvements often end up meaning no improvement at all for the end user”.

Written starkly and honestly, this 10x better makes a lot of sense. Why would you switch to a new energy source to power your home if it is not 10x better than what you are using today. People don’t believe the hype of the untested, they factor out the good news story, and instinctively fall back on what is tried, tested, and works 24/7/365.

The same surely goes outside the technology business. Why would a customer switch to another service provider unless the competition is not just a little better but hell of a lot better, say 10x better. It’s a high number, but it makes a lot of sense.


What Does  It Take

He reflects that “No matter how much the world needs energy, only a firm that offers a superior solution for a specific energy problem can make money”. And, it is clear that if your business model depends on the support of the government(whether by handouts or special rules), you have a very short future.