How to Win by Being Right and Contrarian: Lessons from Zappos to DoorDash

1. Focus on Enduring Impact

In life’s ‘infinite game’ where there’s no finish line, focus on your enduring impact and what you want to accomplish, rather than short-term goals.

2. Define Core Values & Impact

To be more successful in an infinite game, clearly define your personal values and the impact you want to have on the world.

3. Consistent Daily Compounding

Value and practice consistent compounding by making small improvements every single day, as this leads to significant long-term growth.

4. Embrace the ‘Power of And’

Adopt the ‘power of and’ mindset to avoid ’either/or’ thinking, recognizing that often you need to achieve multiple objectives simultaneously (e.g., fast shipping AND fast website).

5. Compound 1% Daily

Focus on compounding improvements by just getting 1% better every single day, as this seemingly small daily gain leads to results far greater than 10x ideas over a year.

6. Be Different, Not Just Better

To succeed, aim to be different, not just better, because being right and contrarian allows you to make more money as nobody else is going after that opportunity.

7. Be Right and Contrarian

To maximize opportunity and profit, strive to be both right and contrarian, as this allows you to pursue opportunities that others are overlooking.

8. Build a Real Business

Focus on building a ‘real business’ that eventually generates free cash flow, as mere eyeballs or users are not sufficient for long-term success.

9. Prioritize Free Cash Flow

Understand that generating free cash flow provides the freedom to invest in new areas, grow, and innovate without constant fundraising pressures.

10. Compete Where Giants Aren’t

Avoid head-on competition with larger companies by identifying and competing in areas where they are not currently focused, leveraging their blind spots.

11. Prioritize User Experience

Emulate Apple’s strategy by making the user experience the absolute core focus of your product and company, even if you’re not first to market.

12. Hire for Slope, Not Intercept

When hiring, prioritize a candidate’s ‘slope’ (high potential and rate of learning/growth) over their ‘intercept’ (current experience), as rapid growth is crucial in fast-moving companies.

13. Hire for Shared Values

When hiring, prioritize candidates who share the company’s values and mission, as a lack of alignment can hinder collaboration and overall company fit, even if they are conventionally qualified.

14. Manage Regrettable Turnover

Instead of just tracking overall turnover, focus on managing ‘regrettable turnover’ (losing your best people) and address why you hired those who contribute to ‘unregrettable turnover’ in the first place.

15. Apply First Principles Thinking

When facing new or different problems, especially in startups, apply ‘first principles thinking’ to reinvent solutions rather than relying solely on playbooks or analogies from past experiences.

16. Identify Crucible Moments

Recognize ‘crucible moments’ as very important, type-one decisions that fundamentally change a company’s trajectory and require careful navigation.

17. Stay Calm, Prioritize in Crisis

During a crisis, the most important action is to stay calm, assess the problem at hand, and prioritize the most critical issues to solve first, second, and third.

18. View Crisis as Opportunity

Differentiate yourself by viewing a crisis as an opportunity for growth and redefinition, rather than just a destructive event.

19. Stop, Look, Imagine, Accelerate

In a crisis, stop, stay calm, look around 360 degrees to assess the situation, imagine a new direction or solution (product, operation), and then accelerate into that path.

20. Revert to Core Values

When traditional playbooks fail, especially in noisy or chaotic times, revert to the core values of the company and its founder as your guiding essence for decision-making.

21. Prioritize First-Order Issues Daily

Start each day by identifying the most important ‘first-order issue’ that needs to be solved, focusing on root causes to influence outcomes effectively.

22. Solve First-Order Issues

When facing a problem, identify and address the ‘first-order issue’ or root cause, as solving this typically resolves the overall problem.

23. Optimize by Analyzing Flow

When processes are broken, analyze the entire flow from beginning to end to identify new solutions that improve overall efficiency, rather than just optimizing individual discrete steps.

24. Make High-Velocity Decisions

Prioritize making high-quality, fast decisions at scale, rather than letting process dictate decision-making speed, to avoid bureaucratic slowdowns.

25. Actively Combat Complacency

Actively work to avoid complacency, understanding that a good reputation can be ruined by a single bad experience, and continuous effort is required to maintain success.

26. Plan for Culture Growth

Recognize that company culture is not static; just as you plan for strategic and financial growth, actively plan for how the culture will grow and evolve over time.

27. Combine Backwards & Forwards Planning

Combine ‘working backwards’ from a future vision with ‘working forwards’ from today’s realities, ensuring the two trajectories align to confirm effective execution.

28. Type 1 vs. Type 2 Decisions

For Type 1 (irreversible) decisions, ‘run out the clock’ to gather all information and ensure high confidence; for Type 2 (reversible) decisions, make a fast call and iterate.

29. Standardize Core, Customize Edges

Build a standardized core product or platform, but allow for customization on the edges to meet diverse customer needs.

30. Success is Values-Consistent Process

Define success as consistently living a process that aligns with your core values every single day, as following through on this process makes you inherently successful.

31. Evaluate with 2x2 Matrix

When making strategic decisions, use a two-by-two matrix of ‘right/wrong’ and ‘conventional/contrarian’ to clearly categorize and evaluate potential paths.

32. Communicate with Honesty

Value honesty and truth by being very direct with people and avoiding sugarcoating, as this fosters clear communication.

33. Learn from Every Person

Adopt the mindset that you can learn many things from every single person you encounter, as the collection of these lessons shapes who you become.

34. Cultivate Grounding Relationships

Maintain strong relationships with family and friends who see you for who you are and will call you out when you’re not being a good person or following through on commitments, providing essential grounding.

35. Choose a Positive Attitude

Actively choose a positive attitude because a negative attitude can lead to a negative spiral and make the world look worse, while a positive one improves perception.

36. Workout Every Day

Eliminate the daily negotiation of when to exercise by committing to working out every single day, ensuring consistency even when you don’t feel like it.

37. Prioritize by Popping Up

Instead of blindly working through a long to-do list, ‘pop up a level’ to identify the most important items, as the critical task might not be at the top.

38. Leaders Enable Team Performance

As a leader, your role is not just to solve problems yourself, but to figure out how to enable the rest of your team to perform and win.

39. Collaborate and Share Knowledge

Foster teamwork by sharing your methods and tricks with others, and be open to learning from their insights, as mutual exchange leads to collective improvement.

40. Seek Outside Accountability

Value external perspectives from people slightly outside your immediate work environment, as their simple questions can reveal insights or expose areas you can’t explain, fostering accountability.

41. Hire Slowly, Fire Fast

Hire slowly to ensure a deep understanding of who you’re bringing in, and be prepared to let people go quickly when they are not working out, to maintain company velocity.

42. Continuously Push Company Speed

Understand that a company’s speed will not increase unless there is continuous pushing, and the best companies maintain this drive to avoid slowing down.

43. Apply Force, Remove Obstacles

As a leader, both applying force (forcing functions) and removing obstacles are equally important for progress, as force often reveals hidden obstacles.

44. Push to Identify Obstacles

Sometimes, you need to actively push against a problem or situation to identify the underlying obstacles that are hindering progress.

45. Mainstream by Removing Friction

To make a fringe activity or product mainstream, focus on removing obstacles and friction for users.

46. Do Things Very Differently

To build a great company, intentionally or unintentionally, strive to do things very differently from existing solutions.

47. Gauge Potential by Rapid Growth

To gauge someone’s potential, look for evidence of rapid movement and multiple promotions in fast-moving previous situations.

48. Return to Basics in Crisis

During ‘crucible moments’ or crises, return to fundamental business principles and prioritize building a profitable company.

49. Tight Budgets Foster Divergent Solutions

When operating with a tight budget and needing to be profitable on the first order, it forces you to find non-obvious, divergent solutions for growth, such as focusing intensely on customer service.

50. Prioritize Customer Retention

Prioritize keeping existing customers and encouraging repeat orders, as it is more cost-effective than acquiring new ones.

51. Optimize for Speed & Flow

Continuously optimize for speed, such as making websites load quickly and streamlining operations flow (e.g., picking, packing, shipping) to avoid batching and improve efficiency.

52. Collaborate to Reduce Costs

Work very closely with key partners (e.g., shipping carriers) to negotiate and figure out ways to reduce costs.

53. Solve Pain Points with Logistics

Proactively address customer pain points (e.g., inability to try on shoes online) by innovating logistics, such as offering fast shipping, free returns, and reverse logistics, to bring the ‘store to their home.’

54. Embrace Returns for Loyalty

Understand that your best customers might have the highest return rates because they feel comfortable trying new things; embrace this to encourage broader purchasing and higher lifetime value.

55. Optimize Return Process Efficiency

Instead of trying to reduce return rates, focus on making the return process as cheap and efficient as possible, as this is the true first-order issue.

56. Differentiate with Liberal Policies

Use liberal policies, such as a 365-day return policy, to differentiate your business, set a high standard, and build customer trust and willingness to try your service.

57. Provide Proactive Sizing Guidance

Proactively provide customers with specific sizing guidance for different brands to help them make informed purchasing decisions and reduce returns.

58. Define & Align Company Values

Invest significant time in defining the company’s values, as shared mission and values are crucial for effective teamwork and preventing misalignment.

59. Co-Create Values with Employees

Involve employees in defining company values by asking for their input on what they believe the values are, what their personal values are, and what they dislike, then synthesize these into core values.

60. Hire Self-Starters, Leverage Strengths

Adopt a management philosophy that hires self-running, self-sustaining individuals and allows them to focus on their strengths, pairing them with others to complement weaknesses.

61. Focus on Strengths, Hire for Weaknesses

Enable individuals to focus on their strengths and strategically hire others to supplement their weaknesses, creating a well-rounded team.

62. Prioritize Customer Experience Over Speed

Avoid growing so fast that the customer experience degrades, as this ultimately harms the business; instead, ensure the best possible customer experience is delivered at any given growth rate.

63. Anticipate Customer Dissatisfaction

Recognize that customers are inherently impatient and unsatisfied, and what is new and novel today will become standard tomorrow, requiring continuous innovation.

64. Maintain ‘Move Faster’ Mentality

Adopt a mentality that today is the slowest you will ever move, and continuously strive to move faster, as a lack of this mindset will lead to slowing down.

65. Review Past Decisions Strategically

Integrate a backward-looking review into your strategic planning to assess past decisions (right or wrong) and identify areas for course correction.

66. Compound in Core Business

Great companies achieve sustained success by compounding at a very high rate within their core business for extended periods.

67. Pursue Adjacent ‘Act Two’

While it’s good to pursue new opportunities (‘shiny pennies’), ensure they are adjacent to your core business and align with a strategic ‘Act Two’ rather than being completely unrelated.

68. Balance Fire and Ice

Strive for a balance between entrepreneurial ‘fire’ (compelling ideas, running hot) and ‘ice’ (cold facts, detailed management) to build the best company.

69. Embrace Creator Mode

In the early stages of a company, embrace the ‘creator mode’ to focus on building something entirely new and unseen (zero to one).

70. Systematically Scale Operations

After creation, shift to an operator mode to systematically understand inputs and outputs, making the system better and scaling the business effectively.

71. Frameworks for Resource Allocation

As a company scales, develop clear frameworks for making management decisions, especially regarding resource allocation between core business and new projects.

72. Cultivate Organizational Leadership

Develop leadership skills to effectively guide the entire organization and think strategically from an organizational standpoint.

73. First Principles for Crucible Moments

Approach each unique ‘crucible moment’ by applying first principles thinking to solve the new problem, as past solutions may not apply.

74. Define Crisis Guiding Principles

When facing a crisis, establish clear guiding principles that ensure your actions align with a long-term vision (e.g., surviving for the next generation) rather than just short-term survival.

75. Strategically Reduce Burn

In a crisis, strategically reduce burn by cutting non-essential expenses like marketing and contractors first, and consider debt financing to avoid burdening existing investors.

76. Project Confidence, Imagine Solutions

In a crisis, project confidence and ‘imagine your way out’ by securing necessary resources and communicating a plan that reassures all stakeholders.

77. Adapt to Changing Customer Behavior

Continuously observe and adapt to changing customer behavior, finding resilience in your business model by identifying new patterns (e.g., local travel during a pandemic).

78. Prioritize Employees in Crisis

When making difficult crisis decisions, prioritize the well-being of employees, making layoffs a last resort, especially when external job markets are challenging.

79. Proactively Help Partners in Crisis

During a crisis, proactively reach out and offer tangible help to your partners (e.g., uploading menus for struggling restaurants), demonstrating support and fostering rapid growth.

80. Prioritize Decision Sequencing

Recognize that ‘sequencing it right’ is crucial for good decisions, as the order in which you execute actions often determines the outcome and impact.

81. Build Early-Stage In-Person

For early-stage companies, prioritize in-person work to build a ‘well of trust’ and capture non-verbal communication, which is crucial for anticipating movements and effective collaboration.

82. Build Culture In-Person

Recognize that building company culture, which includes behaviors, rituals, and narratives, is significantly harder to achieve remotely and benefits greatly from in-person interaction.

83. Adopt Hybrid In-Office Model

Companies should adopt a hybrid model with a certain number of in-office days per week to foster culture and in-person connection, while acknowledging the permanence of remote work.

84. Design Systems for Work Model

Regardless of whether you choose in-person, remote, or hybrid, design robust systems and processes to effectively support and compensate for the chosen work model.

85. Reserve Important Events In-Person

For critical events like important all-hands meetings or off-sites, ensure everyone gathers in person, while other communications can be handled remotely.

86. Pick Right Company Over Cheap

When investing, prioritize picking the right company, even if it means slightly overpaying, rather than investing in a cheap but less promising opportunity.

87. Underestimate Long-Term Tech Impact

When evaluating technology changes, be wary of overestimating short-term impacts and remember to underestimate the profound long-term changes that will occur over a decade.

88. AI for Automation & Reinvention

Leverage AI not just for massive cost savings through automation, but also to fundamentally reinvent and improve the customer experience.

89. Invest in Persistent, Workflow-Embedded AI

When investing in AI, look for solutions that persist, have unique distribution, are embedded into workflows, offer true long-term ROI, and fundamentally change the user experience.

90. Avoid Incremental AI Refinements

Avoid investing in AI solutions that offer only small, incremental refinements to what large foundational models already do, as these are likely to become ‘roadkill.’

91. Avoid High-Churn AI Businesses

Avoid investing in AI companies that show fast adoption but have poor churn rates or lack a sustainable business model, as high usage or test revenue alone is insufficient.

92. Don’t Fear Incumbents

When entering a market, do not be afraid of incumbents, as history shows that large companies often have internal issues that prevent them from winning new technological shifts.

93. Embrace Open and Closed Source

Recognize that the technology world is built on ‘and,’ meaning both open and closed-source approaches will coexist and be important, rather than choosing one over the other.

94. Advocate Low Early Tech Regulation

Advocate for minimal regulation in the early stages of new technologies like AI, allowing for experimentation and growth, even if it introduces some problems.

95. Don’t Fight Technology

Recognize that fighting against or over-regulating technology has historically proven ineffective and counterproductive to human productivity.

96. Regulate Tech Application, Not Research

When regulating technology, focus on its application when it reaches consumers (e.g., engines on streets), rather than stifling early-stage research and development.

97. Trust Market to Drive Tech

Trust that the market will naturally drive the adoption and development of new technologies like AI, as capital and talent will flow to opportunities.

98. Prioritize UX, Then Pounce

Learn from Apple’s strategy: prioritize creating an exceptional user experience, even if it means waiting, and then aggressively ‘pounce’ on the market.

99. Sequential or Parallel for Efficiency

To achieve greater efficiency, strategically decide whether to approach tasks sequentially (one after another) or in parallel (simultaneously), depending on the problem.

100. Break Problems for Parallel Execution

When managing a team, break down large problems (e.g., software development) into smaller components that can be worked on in parallel by multiple team members, increasing efficiency.

101. Build ‘Pouncing Machine’

Instead of trying to predict the future, build your company into a ‘machine’ that is ready to ‘pounce’ on opportunities when they become clear.

102. Let Customers Pull You

When considering market expansion, wait for customers to ‘pull’ you into new areas (e.g., asking for grocery delivery) rather than trying to push them into what you think they want.

103. Avoid Tackling Too Many Problems

Avoid the risk of tackling too many problems at once, as focusing resources on multiple areas simultaneously can come at the expense of effectively solving any single one.

104. Deeply Solve Core Problems

Identify and deeply solve a core problem (e.g., restaurants lacking delivery staff) to expand the market by serving previously unaddressed needs.

105. Start Focused, Expand Over Time

Begin with a very focused problem and a simple solution to clearly communicate your offering, then gradually expand your remit as you earn customer trust.

106. Flexibly Accommodate, Then Standardize

In the early stages, be flexible and accommodate customer needs (pull the accordion out) to win initial clients, then gradually push for standardization as you gain scale, potentially segmenting customers into personas.

107. Earn Standardization Through Value

Earn the right to standardize by first accommodating partners and demonstrating value, then leveraging scale and network effects to introduce more standardized processes.

108. Avoid Early Standardization Hubris

Avoid the hubris of trying to standardize too early; instead, bring in customers to learn what truly works before imposing a standard solution.

109. Top-Down or Bottom-Up Problem Solving

Select either a top-down or bottom-up approach for problem-solving, as some problems are better suited for one method over the other.

110. Break Hard Problems Down

Break down complex problems into smaller, bite-sized components and solve each individually to make the overall problem more manageable.

111. Adjust Altitude for Optimization

For global optimization, ‘pop up’ to a higher perspective; for local optimization, ‘go down’ into the details.

112. Right Altitude for Problem Solving

Ensure the problem is framed at the correct ‘altitude’ before attempting to break it down into smaller, manageable pieces.

113. Plan Top-Down, Execute Day-to-Day

Plan top-down by plotting your main path and alternative paths with scenario analysis, then execute day-to-day, ready to course-correct to a backup path if needed.

114. Change What Isn’t Working

Actively change what isn’t working for you or your company, rather than continuing down the same unproductive path.

115. Give Fact-Based Specific Feedback

When calling someone out or giving feedback, be fact-based and provide specific examples of what has and has not been working.

116. Adopt a Yes And Mindset

When facing challenges, adopt a ‘yes, and’ mindset to create more options and avoid the limitations of ’no, but’ thinking.

117. Measure Velocity Not Just Speed

Measure company progress using ‘velocity’ (speed with direction) rather than just speed, as the combination of how fast you’re going and in what direction is crucial.