No company has a culture; every company is a culture. A startup is a team of people on a mission, and a good culture is just what that looks like on the inside. The first team that I built has become known in Silicon Valley as the “PayPal Mafia” because so many of my former colleagues, including Elon Musk, Reid Hoffman, and David Sacks, have gone on to help each other start and invest in successful tech companies.

Excerpted from Zero to One: Notes on Startups, or How to Build the Future

We didn’t assemble a mafia by sorting through résumés and simply hiring the most talented people. I had seen the mixed results of that approach when I worked at a New York law firm. The relationships between lawyers I worked with were oddly thin. They spent all day together, but few of them seemed to have much to say to each other outside the office.

Why work with a group of people who don’t even like each other? Taking a merely professional view of the workplace, in which free agents check in and out on a transactional basis, is worse than cold: It’s not even rational. Since time is your most valuable asset, it’s odd to spend it working with people who don’t envision any long‑term future together.

Rule 1: The Best Startups Work a Lot Like Cults

In the most intense kind of organization, members abandon the outside world and hang out only with other members. We have a word for such organizations: cults. Cultures of total dedication look crazy from the outside. But entrepreneurs should take cultures of extreme dedication seriously.

The extreme opposite of a cult is a consulting firm like Accenture: not only does it lack a distinctive mission, but individual consultants are regularly dropping in and out of companies to which they have no long‑term connection whatsoever.

Every company culture can be plotted on a linear spectrum:



The best startups might be considered slightly less extreme kinds of cults. The biggest difference is that cults tend to be fanatically wrong about something important. People at a successful startup are fanatically right about something those outside it have missed.

Rule 2: Giving People a Chance to "Change the World" Is a Lousy Way to Recruit Employees

Recruiting is a core competency for any company. It should never be outsourced. Talented people don’t need to work for you; they have plenty of options. You should ask yourself: Why would someone join your company as its 20th engineer when she could go work at Google for more money and more prestige?

Here are some bad answers: “Your stock options will be worth more here than elsewhere.” “You’ll get to work with the smartest people in the world.” “You can help solve the world’s most challenging problems.” Every company makes these same claims, so they won’t help you stand out.

You’ll attract the employees you need if you can explain why your mission is compelling: not why it’s important in general, but why you’re doing something important that no one else is going to get done. However, even a great mission is not enough. The best recruit will also wonder: “Are these the kind of people I want to work with?” You should be able to explain why your company is a unique match for him personally. And if you can’t do that, he’s probably not the right match.

Rule 3: Everyone at Your Startup Should Have Just One Job

Internal peace is what enables a startup to survive at all. But most fights inside a company happen when colleagues compete for the same responsibilities. Startups face an especially high risk of this since job roles are fluid at the early stages.

The best thing I did as a manager at PayPal was to make every person in the company responsible for doing just one thing. I had started doing this just to simplify the task of managing people. But then I noticed a deeper result: Defining roles reduced conflict. Eliminating competition makes it easier for everyone to build the kinds of long‑term relationships that transcend mere professionalism.

Rule 4: Hire Employees Who Are Excited to Wear Your Logo on Their Hoodies

Startups have limited resources and small teams. They must work quickly and efficiently in order to survive, and that’s easier to do when everyone shares an understanding of the world.

It’s a cliché that tech workers don’t care about what they wear, but if you look closely at the T‑shirts people in Mountain View and Palo Alto wear to work, you’ll see the logos of their companies—and tech workers care about those very much. The startup uniform encapsulates a simple but essential principle: Everyone at your company should be different in the same way—a tribe of like‑minded people fiercely devoted to the company’s mission.

Above all, don’t fight the perk war. Anybody who would be powerfully swayed by free laundry pickup or pet day care would be a bad addition to your team. Just cover the basics and then promise what no others can: the opportunity to do irreplaceable work on a unique problem alongside great people.

Excerpted with permission from ZERO TO ONE: Notes on Startups, or How to Build the Future by Peter Thiel with Blake Masters. Copyright 2014 by Peter Thiel. Published by Crown Business, an imprint of the Crown Publishing Group, a division of Random House LLC, a Penguin Random House Company.