The following is a summary of Zero to One: Notes on Startups or How to Build the Future. I do not claim to own any of the book's original work, the following is simply a bulleted summarization with a few direct quotes. All copyrights and trademarks belong to their respective owners. Chapter 9 - Foundations:

• A startup messed up at its foundation cannot be fixed (Thiel’s Law)
  • Decisions made early one are very hard to change later
• You cannot build a great company only a flawed foundation
• Founding Matrimony (upon founding, co-founders get ‘married’:
  • When starting something choosing a partner is the most important decision
  • If founders fight, the company suffers
  • Founders should have a background before the founding of the company
    • Otherwise, its luck
• Ownership, possession, and control:
  • Everyone in your company needs to work well together
  • Doing it alone guarantees alignment
    • Its incredibly hard to do it alone though
  • Need structure in your company to keep everyone aligned for the long term
  • Misalignment can come from the following:

1. Ownership: who legally owns the company(‘s equity)?
   1. Usually founders, employees, and investors
2. Possession: who actually runs the company on a day-to-day basis?
   1. Usually managers and employees
3. Control: who formally governs the company’s affairs
   1. Usually Board of Directors (founders and investors)

• In the boardroom, less is more
  • The smaller the board, the better the communication
  • In a small board though, it is easy to oppose/accept anything
    • This is why choosing board members is very important
  • A board of three (3) is ideal
    • Should not exceed five (5)
      • Unless publicly held
• On the Bus or Off the Bus
  • Everyone you involve with the company should be involved full time
    • Rule can be broken (accountants, lawyers, etc.)
  • Anyone who does not own stock (options) or get regular salary will not have the company in their best interest (misaligned)
    • They want value now, and will not help you build it for the future
    • This is why consultants, part time employees do not work
    • Even telecommuting should be avoided
• Cash is King:
  • When people are fully committed, they should be properly compensated
  • A company does better the less the CEO pays himself
    • Thiel says this is the single clearest pattern he’s noticed in being a VC
    • “In no case should a CEO of an early stage, venture-backed startup receive more than $150,000 per year in salary.”
      • Bills do not matter in deciding a gigantic salary
    • A cash poor executive will focus on increasing the value of the company as a whole
    • A CEO sets the example for all under him, high or low salary
  • Cash offer optionality to your workers
    • High cash compensation teaches workers to take value from the company rather than to help build it
    • “Any kind of cash is more about the present than the future
• Vested Interests:
  • Equity offers something better than high-cash salary because it vests interests of your employees in the company
  • Must be allocated very carefully as to not create misalignment
    • Handing out equal amounts is a mistake
      • People work different amounts, etc.
    • Employees should get more equity depending on how early the join due to risk
  • Some people only want cash and refuse equity (equity is tied to one company, could be worthless)
    • If they refuse equity it is useful to determine if they care about the cause
• The ‘birth’ of a company happens just once and in that moment the founder has the opportunity to set the rules and foundation for the future

  If you've liked this summary, I highly recommend you get the full book here: Zero to One: Notes on Startups, or How to Build the Future < Previous Chapter | Overview | Next Chapter > - Alec Kriebel