September 6, 2016 - Comments Off on Commonplace #0023

Commonplace #0023

Try never to be the smartest person in the room. And if you are, I suggest you invite smarter people… or find a different room.

Acknowledging what you don’t know is the dawning of wisdom. I believe in the discipline of mastering the best that other people have figured out. I don’t believe in just sitting down and trying to dream it all up yourself. Nobody’s that smart.

Any return stream can be broken down into its component parts and analyzed more accurately by first examining the drivers of those individual parts.

Learning how to build a sustainable business is the outcome of experiments which follow a three step process. Build, measure, learn.

Why is experimentation so important in an economy? The answer is that experimentation is the best way to deal with one of nature’s solutions to dealing with risk, uncertainty and ignorance: a complex adaptive system. An economy is a complex system in that it is networked and therefore adaptive in ways that a simple formalism, such as used in physics, will fail to predict.

In the case of complex adaptive systems like an economy or a business, the correct approach is to discover solutions via trial and error rather than try to predict.

All a founder or venture capitalist can lose is 100% of what they invest in a startup and yet what they can potentially gain is potentially many multiples of that investment.

Knowing what you can’t predict is one of the most valuable things you can know. Discovery which happens via experimentation via trial and error is a vastly superior way to deal with unpredictability than trying to predict what can’t be predicted.

  1. Some startups are an attempt to create entirely new categories of businesses at global scale (e.g., Uber, Salesforce, or Airbnb).
  2. Some startups are about incremental or local innovation, such as a new frozen yogurt shop or sushi restaurant.

Published by: seanwing in notes

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