When we think about the future, we hope for a future of progress. That progress can take one of two forms. Horizontal or extensive progress means copying things that work — going from one to n. Horizontal progress is easy to imagine because we already know what it looks like. Vertical or intensive progress means doing new things — going from zero to one. Vertical progress is harder to imagine because it requires doing something nobody else has ever done. If you take one typewriter and build 100, you have made horizontal progress. If you have a typewriter and build a word processor, you have made vertical progress.
— Peter Thiel, Zero to One
Our culture celebrates the people and companies that bring bold change to their industry — advertising campaigns that don’t shy away from the social reform their industry needs; apps that transform the way customers access an old-fashioned service; entrepreneurs who bootstrap a product that our world never even knew it needed. But how do you bring this kind of bold progress (or “vertical progress,” as Peter Thiel would say) to your organization? The first step is to shake off the Proximity Paradox that leads you to believe you’re operating within a box of constraints.
When I was ten years old, I loved learning about animals and how they lived. I would visit the library and check out all the titles on the history and care of different animals. I had a pet hamster named Dolly, and I once spent an hour and a half reciting hamster history to my sister’s friend. It’s not how most ten-year-olds would choose to spend their afternoon. And, I am quite sure it’s not what my sister’s friend had planned.
One day, I discovered a book on hamster husbandry and learned that hamsters have one of the shortest gestation periods of all mammals (eighteen days). I had been looking for a way to make money from my home, and I knew that lots of kids at school were buying small pets. So I bought a male hamster to breed with Dolly.
The first male was a dud. He wasn’t interested in breeding, so I returned him to the pet store. It was an odd reason for a kid to return a hamster, but the pet store allowed me to exchange him for a different male.
The next male was on his game. Soon, I had a litter of baby hamsters. I sold them to my friends at a discounted price of $5, but after a few litters, I had a surplus. I called a national chain of pet stores and asked to speak to the manager. As a kid, I didn’t really know how one was supposed to sell hamsters to a pet store, but I figured there was no harm in asking. The manager on the other end of the line was surprised to hear a ten-year-old kid asking about his hamster-procurement process. Many of the national chains buy from large wholesale suppliers through a traditional tender process, but this particular manager found that process to be tedious. He was open to a more nimble idea.
I told him I had some hamsters to sell and said I could regularly supply them — not a lot of volume, but a regular stream of beauties. He agreed to give me a shot.
Black hamsters were quite rare in pet stores, so that’s where I started. I tried to get orange and black combos, as they are more rare still. I didn’t have a ton of luck in this department as it turns out that only females could be this color due to recessive and dominant genes, or something along those lines. Nonetheless, I was able to sell my little critters.
My hamster-breeding business only lasted a couple of years. Eventually, having a bunch of hamsters in my house became more work than it was worth. I made about $500, which may not seem like a lot, but the profit margins were pretty good for a ten-year-old kid’s business.
I realize the scale of my operation was pretty miniscule compared to what was happening with national suppliers, but a well-connected network of kid businesses could potentially shake up the market from a very unexpected place. As a child, I could see this opportunity because I was free from expectations to fit into a pet store’s traditional hamster-procurement model.
Your company may feel like a box of constraints, thickly padded with rules on what you can and cannot do with your brand, products, and marketing. It’s often no better outside the walls of your office. Your industry is simply a larger box with its own code of accepted activities and behaviors. To truly break free from your competition, you need to create distance from your industry.
In this section, we’ll show you how to escape the box and find new customers to serve and new companies to compete with.