Separate the variables:
On the left, take the partial fraction decomposition:
Now integrate both sides:
Normally, at this point you would solve for C using the initial condition. However, in this case we have y(0) = 1, and ln|1 - 1| = \ln(0) is undefined.
Notice that if we let y be a constant function, then y' = 0.
Knowing that y(0) must be equal to 1, let's take our solution to be y(x) = 1. Then y'(x) = 0, and on the right side we have 1 - y = 1 - 1 = 0 as well.
So, the solution to this equation is y(x) = 1.