Vertical vs Horizontal progress

from Zero to One: Notes on Startups, Or How to Build the Future.

Peter Thiel explores many concepts in his book, Zero to One — one of which is the concept of vertical and horizontal progress which is essentially technological innovation vs globalisation.

Vertical Progress vs Horizontal Progress

Technological innovation vs Globalisation

Building startups that push technological innovation forward will create a difference in the long-run. Eg., Magic Leap. While companies that are built around emulating successful ideas in a different geographical location might earn short-term profits, they may not create a long-lasting impact.

My assumption here is that there is an ideal point on the above graph for a company to be in the future (up and to the right). A company can create the maximum value if it has technological advantage over its competitors and predecessors and manages to scale effectively. There are obviously infinitely many paths that can be taken from the present to that ideal position. But, can this question be asked after the company is created. As Peter clearly says, a company’s founding moment is singular. The decision to get there begets many follow-up questions that require honest answers.

• Am I rightly positioned to solve this problem or start this company? If so why?
• Is my cofounder/ team rightly positioned to solve this problem together?
• Do we know enough about the industry and the dynamics to be able to confidently predict future trends?
• When do we know we have reached this ideal point? How can we measure it?
• How can a company move from its present position to it’s ideal position on the graph? Not every company can reach that ideal position. There are some qualities that the company must have in order to even consider this.
• How will companies that push technological innovation move forward?
• Is globalisation a result of technological progress?

Understanding how we acquire technological progress or globalise and ways is of paramount importance.