Why “creative monopolies” are good

Venture capitalist Peter Thiel was one of the co-founders of PayPal as well as one of the early investors landed by Facebook. According to Forbes, his net worth has surpassed the $2 billion dollar mark. With such credentials, it is not surprising that his book “Zero to one” has become an instant classic for innovation talk.

Peter Thiel stresses that progress may come from “horizontal processes” which essentially “copy things that work in order to make them better”. In his mind, this innovation process “takes the world from 1 to n, adding more to something familiar”. As opposed to such scenario, Thiel also identifies what he calls “vertical progress”.

What exactly do we understand with that concept? To put it simple, it is the process of making something new, a singular act of creation that is fresh and helps take us from 0 to 1. Horizontal developments happen in the market economy, while vertical leaps take place in its most competitive corner, that is, the technological sector.

From a business point of view, Thiel is more interested in going from 0 to 1 “because it helps capture more value. Big businesses can be bad businesses: an airline’s profit margin is 100 times lower than Google’s”.

Under Thiel’s thinking “creative monopolies” should not be vilified, but glorified! He believes that such companies “give customers more choice by adding entirely new categories of abundance. They are good for society and they are powerful engines to make things better”.

Of course, “creative monopolies” have nothing to do with hermetic companies that make a profit by restricting competition. Instead, they are open, innovative firms that develop exciting opportunities and create entirely new markets. Think of what Apple has done for technology or what Microsoft did back in the day.

Whether you specialize on horizontal advances or you specialize on vertical progress, Ennomotive is the right place for you!

Our challenges will offer you the chance to make real changes in the day to day operations of prestigious companies.

 

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