Abstract
This article analyzes startup businesses through the dual lens of information theory and chemical reaction kinetics. In this view startups are complex emergent information systems whose information content is modulated by the dynamic formation/dissolution of internal and external connections. Much in the startup formation process precisely parallels the dynamics of complex organic reactions, specifically the hypercycle — an autocatalytic higher order reaction cycle which is involved in complex biological processes such as DNA replication and cell division. After cataloguing analogous dynamics inherent in both hypercycles and startups, several optimization strategies which could potentially benefit incubators startup “production factories” are discussed in more detail. Central to this discussion is the concept of self-replicating catalysts (enzymes), which stabilize and align high-dimensional reaction constituents into viable connections (products), and how they can be applied in the startup context. Finally, some suggestions are made about how these principles might be implemented in a new, more efficient type of incubator — the Hyper Incubator.
Background
The current startup scene is awash with literally hundreds of geographically separate but methodologically comparable organizations whose modus operandi could be described as “startup assembly”. Behind the flashy promises of “seamless integration” and “unique approach” hide fundamentally identical attempts to assemble bona fide business models through a rather tiresome “meat grinder” process with occasional specific idiosyncrasies. The use of the term "assembling" is not incidental — it is meant to convey a sense of deterministic, industrial-era assembly line approach to startup “production” — in contrast with something more organic like "growing" which focuses on emergence instead of mechanistic recipes.
Despite all the rhetoric, the incubator/accelerator process is quite rigid, mechanical and abysmally inefficient. This latter characterization is most telling as the ever-present statistic of “9 out of every 10 startup businesses fail” (the preferred small sample size hiding the more likely reality of 99 out of a 100) has not changed since the emergence of incubators . Whatever the individual success rate of a given incubator happens to be, it is not moving the needle of the global statistic, begging the question — why not? Why should we accept the failure rate of over 90% as normal? Even if 1-2% makes up for those failures, the question of inefficiency should not be dismissed easily.
One of the principal reasons why the current model of incubators falls short in moving the needle of startup failure statistics is its inertial insistence on mechanistic, linear, non-systemic approach to a paradigm that is in fact far more complex than an assemblage of "parts". A business is, first and foremost, an intellectual construct — perhaps as much today, in the Information Age, as in the time of the Dutch East India Company and the Industrial Revolution. A startup — a business in its gestation stage – is a nascent dynamic information system primarily characterized by tentative (this is the dynamic aspect) connections between its own parts and its micro-economic niche. As such, it must be dealt with using systems theory paradigms, not industrial models of “building blocks”, “fitting puzzle pieces” or “interconnecting gears”. A better model for understanding startup mechanics is a complex biochemical reaction — multi-stage, multi-factor, dynamic, characterized by variable rates of forward and reverse reaction rates, individual critical threshold levels (activation energy levels), multiple potential equilibria points and far-from-equilibrium irreversible dynamics.
This essay describes a particular complex reaction cycle of interest — a hypercycle — that appears to have deep parallels with startup dynamics which are perhaps more than purely coincidental.
The last part of the essay contains a thought experiment of an idealized “reaction chamber” (a platform) that implements hypercycle dynamics in the micro-economics realm of startup formation — a “Hyper Incubator” that could potentially move the needle and make the dismal 90+% failure rate the thing of the past.
Systems, Hypercycles and Startups
- Startups are Systems
Systems are characterized by the overarching predominance of synergistic interaction between elements of a system whose combined effects dwarf any intrinsic properties and/or effects of individual elements. Thus, one can talk about an ecosystem — an integrated whole comprised of individual interacting biological components, a financial system — comprised of individual entities like central banks, investment houses, regulating agencies, etc. All of these systems might have common characteristics that describe their dynamics regardless of the particular elements that they are made of. This is the key reason for the emergence of a new discipline — systems theory, which seeks to abstract the particulars and focus on system as a complex network of interconnected entities. Systems theory findings (specifically, self-similarity of complex systems at different scales — fractals) give us a warrant to look at one system (complex biochemical reaction cycle) and attempt to identify a subset of its systemic features could apply to another system from a completely different domain — business systems, specifically incubators and startups.
Systems theory provides the scientific basis for postulating that certain features of a system in one domain (complex biochemical reaction cycle) could be generalized for another system in a completely different domain.
A startup is a potential business system comprised of individual elements brought together and configured in a particular way in order to achieve certain critical level of synergy — interaction between elements that evolves a startup into a viable organism — a profitable company. As a system, a startup is never in a state of static equilibrium — it is constantly changing, constantly adapting to feedback from its environment and its internal configuration state changes.
One can easily see that in a complex global environment we find ourselves in, a path taken by a particular startup system — as defined by its particular configuration and local constraints — can rapidly diverge even with slightest alterations — for all intents and purposes each startup is really as unique as a snowflake, thus making the idea of a predefined “action map” absurd. Taking this systems analysis one step further, we can surmise that all of the paths lead to two particular attractors — disintegration and “success”. The area around each attractor called attractor basin appears to be much larger for disintegration than for success. This could explain why the approach of “let’s combine the parts, put them through XYZ process and see what happens” most frequently produces a path that converges on the disintegration attractor.
2. Much of startup "chemistry" can be modeled by real chemistry dynamics
Startups are by definition unstable micro-economic systems which are destined either to transform themselves into viable stable systems — profitable businesses, or rapidly decline and disintegrate. Similar processes are familiar to us in the realms of mechanical physics, organic chemistry and biology. They are often described as dynamic nonlinear systems characterized by far-from-equilibrium dynamics which naturally lend themselves to analysis using open systems' thermodynamics and in special cases — systems theory.
Some very interesting analogies can be drawn between factors that make a chemical reaction viable vs. factors that make a startup into a viable organization. Since startups are systems and all systems have some intrinsic properties that transcend their individual realms of operation (i.e. chemical, biological, social or economic), it would make sense that what initially appears as coincidental parallels may eventually be recognized as systemic properties that underlie patterns of interaction at a higher level of abstraction than mere chemistry.
Let us now enumerate a few of these analogies that seem most pertinent. We will use the term “business reaction” to describe some transformation step in the process of moving from a startup to a stable business configuration.
Proximity
In any chemical reaction the initial reactants have to be brought into contact — they have to be integrated in the same space-time locus. This most apparent pre-requisite translates well into the business context of startups. It may seem like an obvious precondition, but it bears explicit mention due to the changing nature of “space” when translated into social, and more specifically, business context. Physical spatial proximity does not have to translate into physical distance, although it often does (founders are often brought together via an actual physical meeting), but it may also be thought of as a network distance – for instance, the number of hops in a social network needed to make an explicit connection. A business reaction may require the minimum distance of 1-2 hops. The synchronicity aspect may seem self-evident but it also needs to be made explicit because of the decaying aspect of certain reactions (neuronal synapses and ant pheromone trails being two classical examples of decaying processes). Time is of the essence! Thus, personal contacts in the context of a social network are often short-lived, unless explicitly cultivated. Social proximity has to be supported by frequent contact, otherwise the potential network distance becomes irrelevant as it translates into an ever-increasing actual distance.
This prerequisite first step is analogous to the initial formation of the startup founders' team, the synthesis of key business ideas and procurement of key resources. The critical mass of the right people has to come together – at the same time — and maintain its proximity for as long as it takes to get the reaction going.
Catalysts (enzymes)
Most complex life-sustaining chemical reactions do not proceed simply by virtue of coming into contact. Several other factors are required and enzymes or catalysts are among the most important.
Enzymes’ role is to lower the "escape velocity", the energy barrier (referred to as the “activation energy” of a reaction) that the reactants need to overcome in order to be joined together into an intermediate form which eventually stabilizes into the end result — the product. Enzymes are also called catalysts because they catalyze the reaction both in terms of reaction rates and in terms of their overall viability (spontaneity).
What then is the mechanism of enzyme functionality — how do they confer this "escape velocity" to the elements of the reaction — the reactants? In order to answer this question one must appreciate the dimensionality of chemical reactions. When one sees a chemical reaction, such as the synthesis of pyruvate from PEP (part of the glycolysis cycle) schematically written out as
, it may not be immediately obvious that in fact this reaction does not take place unless a precise arrangement of the reactants is achieved in 3-dimensional space — just like a key and a lock have to be fitted together in order to unlock a door. In this particular reaction this is achieved with the help of the enzyme pyruvate kinase which brings ADP and PEP together (see pic.1) — its intricate spiral arms lock the reactants into their respective “active sites” from which they can be fitted together like “lock and key”.
Enzymes are highly reaction-specific due to their individual sophisticated 3-D structure — thus they catalyze only specific reactions by arranging the reactants in a particular higher-dimensional (3-D) conformation which brings them together in just the right way — with their contact surfaces arranged at an optimal angle and their potentially interfering parts rotated out of the way.
In a startup environment the role of enzymes is often played by board members, investors, advisors, incubator structures that allow for both internal and external higher-dimensional startup configuration — an arrangement that allows the startup to “fit” into new or existing markets, to fit with other key players in the field — partners, vendors, customers and human resources.
It is important to note that just like enzymes are highly reaction-specific, so too must be the activity of “helpers”. Each startup configuration must be tailored individually — otherwise it may actually have the opposite effect, slowing down the progress, instead of facilitating it.
Activation Energy
Most complex [biological] reactions are endothermic — they require input of energy to proceed. Another way of stating it is that most complex reactions do not occur spontaneously — they require an energy source that produces necessary work to initiate the reaction. This energy is typically supplied by coupling an endothermic reaction with other exothermic reaction which produce energy as their output. When the net energy gain is negative, it allows the reaction of interest to proceed spontaneously and often irreversibly far to the right from the equilibrium point.
If this is a mere analogy of a startup mechanics, it is almost too perfect. Startups do not spontaneously “react” to become a business. They almost always require a large input of energy and work. Some of the work is in the form of “sweat equity” by the founders, but it is almost never enough.
The critical energy level required by startups to launch is almost always capital — some minimum amount of seed funding needed to move past the equilibrium point of "planning" to the execution phase — the point of “no return”.
Concentration
Most reactions require a “critical mass” to proceed — simply because of the stochastic nature of colliding particles — whether in a gas or fluid — one must have enough of them to ensure enough “successful collisions”. Even when catalysts are involved, the initial collision of reactants with catalysts is still random and will only happen when a certain threshold is reached.
Most startups also need to reach certain threshold levels of concentration — both in terms of effort and time allocation, but also in terms of distillation of key objectives and requisite activities. As with most other pre-requisites there are critical levels of concentration of effort (the will to succeed) and of key resources (typically in the form of business connections and capital) that must be reached for a business reaction to proceed.
Purity
A close counterpart of concentration is purity — absence of interfering particles that “clog up” the reaction by binding the reactants to them instead of allowing them to interact with each other. It is probably apparent that non-essential or wrong people can kill a startup faster than any external factor.
Assembling a hundred smart people in a room will likely achieve nothing — as they will all be pulling in different directions. What needs to happen is isolation — breaking up that hundred into smaller teams that can rally around a particular objective.
Purity translates into having all the right resources and having no or minimum of extraneous resources. Purity can also mean a purity of a business model — a model that is too vague or attempts to do everything is likely to fail because it is contaminated by too many competing objectives.
Solvent (Environment)
Some solvents can effectively halt reactions from proceeding, while others can magnify reaction rates by half a dozen orders of magnitude. Solvents, just like enzymes, have a role in bringing the reactants together or in keeping them apart. Water is a great solvent for most biological reactions — which is why water makes up ~60% of our body mass. The reason why water is such a good solvent is because of its versatility — it has about neutral pH of 7, and so it can easily function as either acid or a base.
The equivalent function to the chemical solvent is played by the social and economic environment that the startup is enmeshed in. Social network connectivity largely determines whether the startup will have access to the right advisors, investors, partner and key personnel. Likewise, the economic and legal environment can be a tremendous factor in success or dissolution of a nascent business.
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Now that we have outlined some key parallels in chemical and micro-economic factors of “formation” — proximity, catalysts, activation energy, concentration, purity and environment — we will now “zoom out” and look at this process at a higher level of abstraction — so that we may perhaps obtain additional insights not recognizable at this level of organization.
3. A higher level of abstraction above a singular reaction is a hypercycle – a cyclical reaction that involves other cyclical reactions as intermediates and catalysts.
Hypercycles are present in all biological systems, but there appear to be no counterpart to them in the startup scene. However, based on the unique properties they confirm in the biochemical context, they may be the final and most pertinent parallel between chemical and business systems – one that dramatically alters startup dynamics. Since hypercycles are integral to the concept of the Hyper Incubator we are going to discuss them in more detail in the following section.
What are hypercycles?
Summary definition: hypercycles are higher-order multi-step reaction cycles that involve reactants which are themselves auto-catalyzing and self-sustaining.
Imagine a substrate (one of the reactants with essentially inexhaustible supply relative to other reactants) and an enzyme that catalyzes its transformation into some product(s). If one of these products is itself an enzyme that catalyzes yet another reaction of the same substrate, producing yet a different enzyme… with the cycle continuing until the original enzyme is replenished, — this is called an auto catalytic reaction cycle (pic.2).
Let's call this entire self-reproducing system I (an information carrier). We could have several of these cycles — I1, I2, I3, ...In. Now imagine that products of one of these cycles are themselves catalysts of a higher-order cycle? (see pic.3) This is what is referred to as a hypercycle.
Hypercycles were first described by the Nobel-prize winning chemist Manfred Eigen in 1971. Since then they have played a major role in our understanding of how one goes from "0 to 1" in biological systems — from non-living organic polymers to a living, reproducing organism — a cell. The iconic example of a biochemical hypercycle is the complex of processes of DNA replication, transcription and translation. An even higher order, multi-step "reaction" — that of cellular division (mitosis) — can also be described as a hypercycle built on top of other hypercycles. What are the advantages of hypercycles, why have they evolved? Most likely the answer has to do with their efficiency due to Darwinian natural hyper-selection that takes place in hypercycle reactions. Since hypercycles are self-perpetuating, a system with several hypercycles that use shared resources (reactants, substrate, etc.) will fiercely compete with each other — with the most efficient of them most certainly phasing out the less efficient one. Thus, hypercycles tend to be the most efficient, self-perpetuating and self-catalyzing “living machines”.
What does all of this have to do with startups? The analogy between undergoing a qualitative phase transition (“0 to 1”) in a biological system and a similar transformation between a relatively “inert” startup and a functional economic unit — a company — is our first clue that the two phenomena may in fact possess similar system-level dynamics that we can learn to analyze and harness to our advantage.
As was demonstrated earlier, a startup can be clearly modeled as a type of chemical reaction. However, a single reaction cycle a business does not make. What one needs is a self-perpetuating, self-reproducing cycle that auto catalyzes itself at every step. Furthermore, when one considers an incubator with multiple startups trying to take off the ground in parallel, the idea of self-replenishment comes to the forefront with an added force.
One of the key elements of a startup cycle is availability of startup capital — typically in the form of venture capital from early investors. However, if all investor capital become tied up, the cycle stops dead in its tracks until more capital comes from external sources or is replenished by investors getting returns from an "exit" of the earlier startup. The same holds true for other elements in the "business reaction cycle" — customers, vendors, partners, human resources, etc. All of these need to be either continually supplied from outside (current model), or they need to be regenerated as part of the modified business reaction cycle – something we may term as the business hypercycle.
What if we could create a completely novel type of "startup Petri dish" — one with an explosive chain reaction potential? The general recipe for this new type of startup incubator is a deliberate structuring of "reactive elements" into higher-dimensional (than the ones currently observed) configurations (or connections) that spontaneously promote the emergence of self-sustaining business hypercycle dynamics at each business creation iteration.
The Hypercycles + Startups = Hyper Incubator
Let's take the familiar business model canvas (see pic.4 below) and transform it into a reaction cycle.
Different elements of the business process are transformed into autocatalytic entities which themselves catalyze their own replenishment /evolution:
Now, let's arrange them together with key business activities and products into a hypercycle formation that models everything that lies on the critical path of a generic business workflow of a startup (or a stable company). We will end up with a diagram similar to the one pictured below:
We have explicitly represented a generic business/startup process model as a series of auto catalytic reactions — each one fueling the next "logical" part of the process until the cycle can restart with some positive or negative feedback from the previous cycle. An example of positive feedback could be an out-of-the-gate market adoption, while a more realistic scenario would be some hypothetical midpoint of tentative market adoption with some significant market friction. In either case, each reactive step fulfills the necessary (but not always sufficient) precondition of the next step in the cycle.
What is lacking in this model is the explanation of how the catalysts of each reactive step are themselves auto-catalytic and self-reproducing. The short answer is — currently they are not auto-catalytic or self-reproducing. Biochemical hypercycles took a long time to develop, but when they did — it likely marked the transition from chemistry to biology. In a similar fashion, business hypercycles have not yet evolved on their own. Thus, while a hypercycle-based startup environment (let us call it the "Hyper Incubator") could be highly desirable (due to its increased synergies not to mention efficiencies of production — we are essentially talking about a runaway chain reaction of continual startup synthesis), we currently do not observe it in operation. This presents an opportunity. Since there are currently no existing startup incubators with hypercycle dynamics, this is a vacant niche in the market that is waiting to be filled.
How could this hypercycle-based model be created in the business/startup setting? The general answer is to create closed loop cycles where there are currently open-ended, one-way business reactions. Before discussing some examples of how this could be accomplished, it should be stressed that the exact mechanics of the closed loop are not as important as the platform/conditions for making this interaction possible. What follows are not exact mechanism recipes but possible scenarios meant to fuel further research to come up with other possible business reaction mechanisms.
One of the shortcomings of current incubators is rigidity of structure — the assumptions about space, time, procedures and sequence of events — all of which have now become virtual concepts with a myriad possible configurations made possible by global connectivity. The Hyper Incubator should transcend such limiting and outmoded prescriptions by providing platforms and opportunities for meetings, connections, procedures, sequences to emerge on their own, given the opportunity and the critical mass of participants. The Hyper Incubator's role is purely in facilitating, upholding and enforcing the quality and integrity of connections — based on their spontaneously emerging structure. Essentially, Hyper Incubator’s role is to be the super enzyme catalyzing (bringing together) as many different potential reactants as possible, analyzing results and continuously prioritizing most efficient pathways. The platform for this is most likely going to be virtual, not physical — although one could see local chapters emerging on their own.
Auto Catalyzing Elements of a Business Reaction Hypercycle
Investors
Investors are a truly crucial component of startup dynamics, providing critical capital and accountability pressure for startups. How could the investor pool become replenished as a result of its own functioning? There are several potential sources that could provide this missing mechanism.
First, successful startups will eventually produce surplus wealth for the founders — a portion of which could be sensibly allocated into venture capital investment for other Hyper Incubator startups. The role of the Hyper Incubator would be to provide incentives and a structure that would make this process as natural and as friction-free as possible. Certainly, having a particular minimum balance in the bank account does not make one an investor, but having been part of the process from the other side of the table — i.e. dealing with investors is itself a catalyzing experience for venturing into that space — part-time or full-time.
One must note several factors that work to diminish this potential avenue of self-reproducibility. The most obvious one is the problem of synchronization – it may take several years before even a single successful startup produces the kind of returns that might warrant its founders to become VCs. Thus, one must hope that a critical mass of "enough projects in the pipeline" will eventually catch up with an ever-increasing need for available capital and equally critically, for experienced investors who will optimize its distribution. (Although one may argue that a completely automated "invest a little bit into everything" strategy may be just as profitable — a topic we turn to next).
An alternative avenue for the source of self-replenishing funds could come from a managed pool of surplus funds which would offer and manage microloans. This pool would be open to founders, early employees, as well as partners of participating firms. This microloan pool would offer investment/funding opportunities and self-catalyzing growth of available investment capital for those participants who prefer to manage OPM (Other People's Money) for a fee rather than enter the more lucrative, but also riskier venture capital scene.
Potentially, a very fertile environment of competing investment / funding strategies could emerge from several auto-catalytic cycles of this nature.
How would a potential "Hyper-Incubator" implement these investor capital dynamics? Clearly, investors and every other participant of the business reaction cycle will act to maximize their return and minimize risk – this is a useful idealization (similar to ideal gas laws in chemistry), acceptable as an approximation even with all the discounting factors of behavioral economics. The Hyper Incubator could provide specific low-energy avenues for these natural inclinations to result in desired outcomes. For instance, VCs could be financially motivated to divert some of their energy from seeking shorter-term returns in order to build longer-term residual income streams — by reproducing their expertise via VC apprenticeship program available to past founders or other participants within the incubator.
The Hyper Incubator could serve as a catalyst for these symbiotic relationships to form – by arranging them in the proper level of multi-dimensional space – not just physical and temporal “meet-and-greet” (that goes without saying), but along other important dimensions — such as ability, experience, access to capital, reputation and many others. This would be the first step in "stabilizing" the formation of these investor-trainee complexes — via special invite-only meetings where investors could meet interested ex-founders or current heads of startups who are interested in diversifying their roles. The next step would be to lower the required "energy of formation" — by providing the legal structure to allow these relationships to be explicitly formalized via prefabricated contracts that would be overseen by the Hyper Incubator (as always the value delivered by the organizers of an entity with network-like properties lies in the strengthening and validation of connections and structures that underlie it).
The use case for microloans and micro-investments will undergo significant transformations in the coming years and possibly enter a new phase transition as a result of smart contracts and decentralized p2p blockchains. A case could be made that initially these micro-investments could be "seeded" by Hyper-Incubators where accountability and reputation of investors would allow an initial level of trust sufficient to kick start a self-perpetuating cycle of pooling funds, investing, exits, payouts and further attraction of pooled investment capital. At a later stage the Hyper Incubator could manage smart contracts on the blockchain by providing neutral 3rd party "safety valves" or arbitration services, — as well as serve as a fiduciary oracle at critical junctures of disbursing funds from investment projects.
As was mentioned earlier, the Hyper Incubator's primary role will be to facilitate and support connections emerging from the interaction of investors/entrepreneurs/startups. One can see how transparency and reputational value of these connections could become an exceedingly valuable commodity – providing insight into key metrics, history of successes and failures, opportunities for data mining and prediction, etc.
Customers
Customers are perhaps the easiest segment of the reaction hypercycle to auto catalyze — in fact this cycle is already present to some degree in local chambers of commerce chapters where business owners meet with each other to see if they can find partners, vendors and also — customers either on a B2B or B2C basis. What is typically missing in these informal setups are incentives — thus the rates of interaction are quite modest and do not really "move the needle".
In order to jump start this auto catalyzing cycle the Hyper Incubator needs to support a structure of incentives for startup/customer interactions — typically in the form of discounts. Why would startups volunteer to offer discounts, thus decreasing their margins at a time when their all-critical cash flow is typically at its lowest? First and foremost, because they will be getting something much more valuable than cash in return — they will be getting free and more accurate market insight, detailed customer feedback which would cost them tenfold if they had to resort to hiring a marketing research firm.
The Hyper Incubator could provide a marketplace platform for the participants to buy/sell their products/services at a discount (something substantial to make it worthwhile) — in return customers would be expected to provide feedback and suggestions to the startup. Once the borderline between customer/investor/vendor becomes blurred the incentives for continuous iterations in these cycles will become self-evident.
Partners (Vendors)
In a sense, partners and/or vendors are not that different from customers – it's the same "reaction", only in reverse. Startups will be interested in getting preferential treatment as "customers" of other current/former startups in return for providing valuable feedback and forming key business relationships with trusted 3rd parties.
As startups "graduate" from the Incubator phase they will be incentivized to cultivate existing business relationships and form new ones — as each new startup joining the Incubator will itself be a possible customer and/or partner. Again, the role of the Hyper Incubator will be to foster and facilitation the formation and maintenance of these relationships — ideally via some flexible platform that can provide virtual shared space — a community – for each member of the network.
Actors (Entrepreneurs/Professionals)
In a fractal-like self-similarity, an individual startup and the Hyper Incubator which contains multitude of startups, are both open, dynamic, far-from-equilibrium systems which are meant to be supplied with a constant flow of outside “potential energy” — this energy being stored in the minds of new entrepreneurs joining the Hyper Incubator. There are certainly a few serial entrepreneurs who take company after company beyond their long-term viability point, however the influx of "new blood" — new innovative ideas — remains a prerequisite for all incubators. What is currently missing is the two-way track between entrepreneurship and professional services. A person who has worked in a startup and know the challenges from the inside should be able to capitalize on that experience — and Hyper Incubator should provide the framework for entering the fast-track of creating a startup from working for one.
Similarly, a former founder may want to offer his services as a consultant or a board member or in any other capacity — mentoring, consulting, educational services, etc. as part of his post-startup phase transition.
The Hyper Incubator could provide high quality business apprenticeship opportunities — something that is completely missing in the current educational and professional tracks. The key is to create both the right incentive and facilitation mechanisms to allow the right people to find each other and form “compound” structures.
Summary
In this essay we have tried to uncover parallels between complex microeconomic systems — startups, specifically the dynamics of their formation/dissolution, and dynamics of chemical reactions — with the object of analyzing whether these similarities are incidental or in fact homologous. We have looked at the hypercycle — a complex auto-catalytic system of reactions – as a possible blueprint for modeling an idealized “business reaction” of startup transition from disconnected ingredients to a viable company. The implication of the latter is that it may be possible to engineer a systemic structure to support auto catalyzing self-replicating cycles that continuously provide all the ingredients (reactants, enzymes, energy of formation) for successful “business reactions” — whose equilibrium constants are overwhelmingly tilted to the right — vis-à-vis the formation of “stable products” — profitable companies. A system like this would become a “supercharged” version of existing incubators – places where startups could be mass produced — but with a much higher efficiency coefficient (currently ~ 1%). We have looked at another critical feature of startups — as systems of interconnected components. As such, the Hyper Incubator (the supercharged version of an incubator) would provide platforms with high degree of plasticity allowing for connections to be formed, maintained, enforced (via reputation scores and other economic incentives) and discovered. We have briefly suggested some of the ways in which individual auto catalytic cycles supporting the overall Hyper Incubator operations could possibly play out — pointing out that the exact sequence and “recipe” is not as important (it will probably emerge spontaneously for each iteration) as providing a flexible platform to make multiple scenarios possible.
Some additional thoughts/clarifications are in the next article.
