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I’m excited to announce that over the next few weeks, I’ll be publishing a series of posts here on Medium on a framework that I’ve been developing over the last month at Social Capital. This framework is based on many other existing theories and ideas (disruption theory, bundling/unbundling, the law of conservation of attractive profits, Nassim Taleb’s Black Swans, Geoffrey Moore’s Crossing the Chasm, and more), and the extent to which it is useful at all will largely be a function of the body of work it calls upon.
First of all, in order to set expectations properly, what is this framework not?
It’s not a formula to predict what the future’s going to be.
Nor is it a formula for what companies will win, or what types of companies to invest in early.
So where IS it helpful?
Where I hope this framework proves to be actually fruitful is in encouraging a certain type of “Spidey Sense” when a certain set of factors come into alignment, and providing a common vocabulary to talk about this occurrence. The upside potential of this discussion, I believe, is that we might have an improved set of terms, concepts and language to describe what is going on when the explosive growth of very special companies catches people off guard. When their early evangelists go on to look like ‘clairvoyant geniuses’, I can’t help but wonder — had there been a more generally understood and accepted language and core framework with which to discuss these companies, could more of us have been on board earlier? More importantly, for every Airbnb that does take off, how many get quietly folded before they reach their breakthrough moment?
When reading through this framework, be mindful that as humans our bias towards the narrative fallacy is strong. I have tried to take care in ensuring that any general principles derived in these essays should make basic empirical sense on their own, should withstand some scrutiny, and hopefully avoid falling into the trap of lazy pattern matching. Nonetheless, the degree to which life and progress move randomly into the future is almost always higher than we believe a priori. So, as should always be the case with these kind of endeavours, proceed optimistically but with a clear mind.
The series will be divided into four parts:
- The [ i / i+1 ] column: Looking at the tech stack and value creation in terms of layers, and how scarce resources are abstracted into abundance that yields a new scarce resource.
- The [ j / j+1 ] column: Looking at the needs, pain and jobs-to-be-done of individual users, and how to navigate the balance between being overserved & underserved.
- Putting i and j together into a common framework, running through a bunch of examples, and then a run-through of how Amazon employs something like this framework deliberately and methodically.
- Making some guesses about what the future looks like in general, seeing if any of it fits into this framework at all (without making any specific bets), and introducing a template of how to ask questions.
You can read the series here: