In search of things new and useful.
How To Think About The Future
As few weeks ago, I wrote a tweet noting that many of the most remarkable scaling startups today were not “Lean Startups” by the traditional sense.
What many of the insights around Customer Development have been really impactful to my thinking, there is something that has always bothered me as the “Lean Startup Movement” has gotten more and more formulaic.
Similarly, I have an unfinished blog post in my drafts folder about how “traction” is overvalued. Over the last several years, we’ve seen more companies get funded at high valuations that are ones that get traction inexplicably. The idea behind these investments is that getting “traction” is hard. Getting “traction” proves product market fit. So you should pile into any consumer service with traction, and trust that the company will figure out what to do with it.
I’ve had a hard time making sense of these sentiments, until I read the summary of Peter Thiel’s CS 183 Class 13: You Are Not A Lottery Ticket. If you have not been reading these summaries, turn off Twitter for this week, and digest these. These posts contain the BEST STUFF ON THE INTERNET RIGHT NOW!!!. The table of contents are right here. Thanks to Blake Masters for capturing these so well.
Back to class 13, Peter introduces a framework for how an individual (or a company, or a country) thinks about the future. On one axis is indeterminate / determinate. From the post:
“The determinate perspective is that things are knowable and you can control them. The indeterminate perspective is that things are unknowable and uncontrollable. There are just too many chance events.”
On the other axis is optimistic / pessimistic.
One of Peter’s points is that this country has moved from a deterministic point of view about the future to an indeterministic view. In a deterministic view, one has firm convictions and makes meaningful investments in time and resources towards a vision. In an indeterministic world view, one thinks of the future as unknowable. If you are optimistic, you still make investments for the future, but focus more on risk management, incremental improvement, and getting the right process. With an indeterminate world view, you focus on process because that is controllable even if the future is unknowable. In a deterministic world view, you develop a (hopefully) well informed view of how the future will pan out and try to create it.
This trend has come more slowly to the startup/tech world, and it makes sense. Startups are about imagining a future as one would like to see it, and creating the dots to get there. But we have seen a move away from deterministic thinking as well. Venture capital is partially to blame here, as we have focused increasingly on simply getting “access” to the best deals, chasing companies with traction, waiting for products to launch first, managing risk, etc. etc.
I’m not suggesting that we throw out the processes proposed by Lean Startup, or that traction isn’t extremely valuable. It’s actually not really an either or thing. What is different is one’s perspective on the future. As I’ve looked at the world through this framework more over the last few days, it’s striking how many things we currently deal with is the direct result of indeterministic thinking.
Whether we know it or not, we love deterministic thinking (that’s why Steve Jobs was so admired), and it’s been making a comeback. I think the new emphasis on elegant design is a great indicator of this. It’s incredibly hard to calculate the ROI of great design, and it can’t really be implemented in iterative steps. Beautiful sites and new, usable product experiences are just better. But sometimes, a lean approach just doesn’t get you there. And sometimes, “traction” doesn’t happen right away.
It’s easy to consider the future unknowable. But I think that is what startups and folks in the innovation economy need to have a POV on. When I think of the most exciting trends that are converging over the next decades – proliferation of internet connected personal devices, ubiquitous data, new human-computer interfaces, and the social graph, the future is really uncertain. But the founders that will change the world will have conviction about how these forces (and others) will play out and solve massive problems based on that conviction. I don’t believe they’ll stumble upon something that gets traction and just figure the future out from there.