Peter Thiel's start-up manifesto: why the PayPal founder and early Facebook investor loves monopolies, the Founding Fathers, and Lady Gaga.

• Author: Mindus, Dan
• Position: Zero to One: Notes on Startups, or How to Build the Future - Book review

Zero to One: Notes on Startups, or How to Build the Future, by Peter Thiel, Crown Business, 224 pages, $27

Just over 20 years ago, Supreme Court Justices Antonin Scalia and Anthony Kennedy made a decision that changed the world for the better. After interviewing Peter Thiel for the position of Supreme Court Clerk, they turned him down.

Instead of settling into a conventional life of well-compensated legal scribbling and relative obscurity, Thiel did an about-face and went on to co-found PayPal, help kickstart Facebook with a $500,000 investment, and emerge as one of the most successful venture capitalists in the world.

Thiel's financial success has allowed him to become a philanthropist with an eclectic portfolio. His money made possible the Seasteading Institute, which works to create floating ocean communities outside the control of any government. He has provided critical support to research aimed at radical life extension. He funded the Thiel Fellowship, which encourages young people with exceptional promise to drop out of college and pursue a startup.

Thiel's new book, Zero to One, reflects similarly nonconformist thinking. Each chapter is littered with ideas that will likely be unfamiliar to his target audience of businesspeople interested in startups and the future of technology. Thiel doesn't care much about incremental change--that's "1 to n" stuff, he says, not truly novel "zero to one" innovation. Instead, he wants to blow people's minds.

Singular creation, Thiel writes, often results in monopolistic companies. By monopoly, he does not mean companies with 100 percent market share or a government-granted guarantee to a particular market. He's talking about Google's relationship to online search or Facebook's to social networking: companies that have dominant positions largely because they're just so much better than the alternatives.

Companies in this category, Thiel argues, are the central drivers of innovation. They use their monopolistic profits to offer great employees above-market compensation and to invest significant resources in new products that might take years or decades to develop. If Google weren't insanely profitable in its core business, we wouldn't have the Android operating system that now powers most of the world's smartphones and we wouldn't be talking about the possibility of self-driving cars. If Amazon didn't dominate its core e-commerce business, we wouldn't have the Kindle or the prospect of drones...