On True Innovation: Real innovative products must be at least 10 times better than their closest substitute
“As a good rule of thumb, proprietary technology must be at least 10 times better than its closest substitute in some important dimension to lead to a real monopolistic advantage.”
“Anything less than an order of magnitude better will probably be perceived as a marginal improvement and will be hard to sell, especially in an already crowded market.”
“The clearest way to make a 10x improvement is to invent something completely new.[…].PayPal, for instance, made buying and selling on eBay at least 10 times better. Instead of mailing a check that would take 7 to 10 days to arrive, PayPal let buyers pay as soon as an auction ended.[…].Amazon made its first 10x improvement in a particularly visible way: they offered at least 10 times as many books as any other bookstore.”
—Peter Thiel, Zero to One, Notes on Startups, or How to Build the Future, Crown Business, 2014