The Biology of Business

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By: Alix Ventures — Supporting Early Stage Life Science Startups Driving Patient Impact 🌟

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The 21st century will be an era defined by biological innovation. Accompanying this revolution, biology will inspire a fundamental change impacting our understanding of business & how we think about building, growing, and sustaining companies of the future.

Analogies have become omnipresent in our understanding and description of business. Business strategy is a chess game. Business competition is a war. Business performance is a sport. It not only trickles into our mindset, but also our language. Decisions are ‘moves’, we have marketing ‘campaigns’, and we ‘run laps’ around the competition. However, the increasing connectivity of our modern business economy, especially for startups, has perhaps demonstrated that business needs a new guiding analogy. As the notion of business shifts away from pure competition and towards collaborative innovation, new ways of modeling and thinking about business have arisen.

Evolution has gifted us over the course of many years a model system to study optimization, process development, and long term survival. At its core, biology is a set of highly efficient and necessary foundational processes from which business systems are highly analogous. Communication systems, resource management, culture, recruiting, and many more pillars of successful companies can be built from the basic principles from biology.

At their core businesses are organisms, in order to survive they must behave like them. Like organisms, businesses must sustain themselves in harmony with co-habitants, share resources, and develop mutualistic relationships. The hierarchical systems that organize business also draw influence from the organization of cells, tissues, and organs. Behind biology lies billions of years of evolutionary optimizations, from resource allocation, process management, to survival instincts.

“Biology is the mental model for the modern business world.”

— Alix Ventures

Team Work

Across biology and business, teams are ubiquitous. Individual cells are team members, and only together are they able to carry out complex tasks to survive. If each cell is an employee, success happens only if each is aligned and incentivized to make the business successful. Disease and business failure occurs when one cell or a group acts independently to the rest of the team. Cancer in particular is a strong analogy for the consequences of an employee that acts solely in their self interest: stealing resources from the company thereby causing chaos and disorder for others. The biggest challenge a business faces centers around alignment of common goals, the ideal business functions like a perfect collaboration of cells. Similar to biology, strong businesses have built in regulatory systems, such as HR, to reign in and repurpose dissatisfied employees. Still, the sense of purpose and direction towards specific goals comes from a master framework. At its foundation, culture serves as the DNA of a business.

“The strength of the team is each individual member. The strength of each member is the team.”

― Phil Jackson

Life forms when ideas meet ambition, but the structure and makeup of the team is what truly allows an organization to grow. The first few hires need to be generalists, totipotent stem cells that can fill any role in the company and quickly make progress. Early cells need support and resources in order to grow, but quickly become self-sufficient. As a company progresses, more specialized cells will be needed, team members that can do specific tasks with high efficiency and high output. The biological model of success is to start with a high functioning collection of generalists and to transition towards specialization to perform increasingly difficult/technical tasks. In biology, the development and specialization of a team is highly regulated, businesses should be careful to do the same: only growing with strong intention/purpose.

Decision Making

Fundamental to survival, be it organisms or organizations, is decision making. Biological machinery has evolved to make complex decisions determining survival or death in a fraction of a second, developing a robust set of tools to evaluate data and make decisions with conviction and speed. As one example, the body’s nervous system provides strong guidance for how to process signals in a business environment. Much like a business, the nervous system collects magnitudes more data than the brain can reasonably entertain and analyze at once. Triaging and filtering important information is a key survival instinct hardwired into the brain. Similarly, a CEO’s brain must be able to sift through information to differentiate “signals” from “noise”, all the while simultaneously allowing critical processes to run smoothly in the background.

“Systemize your decision making.”

Ray Dalio

Systematized decision making is not only deployed by upper level management level, but also by various functional groups within an organization. The body is remarkably efficient in how it functions in large part due to its ability to delegate away decisions to processes and systems that do not require active cognition. The reliance on algorithms to handle decision making controls basic biological functions, including regulation of enzymes, as well as the production and destruction of other key biological molecules. Control systems are not only ubiquitous throughout the body, but also in large well functioning businesses. Functional teams in fact deploy project management tools and processes, such as Agile/Lean Six Sigma to systematize decision making as well. These methods keep teams communicative, result driven, and productive just as regulatory cells/molecules ensure proper function of tissues/organs. Businesses live and die by the decisions their teams make on an everyday basis. Biological systems have understood that systematized decision making simplifies choices, thus promoting overall odds of survival and enabling growth.

Business Interactions

Nothing exists in a vacuum, biology and business are not without exception. As businesses grow, alongside their operations, their interactions with other businesses become increasingly more important. The individual merchants & modern corporations embody the increasing degree of complexity displayed in biological organisms. Individual merchants function like bacteria: not requisite to collaborate and intensely focused on individual survival. While multicellular organisms function, like modern corporations: required to coordinate in order to cooperate and able to perform tasks of greater complexity. Within whole organisms, the ability to function in larger groups dictates success. Similarly, the true value of a business is more than the sum of its parts.

“Our lives are shaped by our interactions with others. Whether we have a long conversation with a friend or simply place an order at a restaurant, every interaction makes a difference.”

Donald O. Clifton

The interconnectedness of business relations/interactions function like a biological ecosystem. While the players constantly change, the system remains at equilibrium; the concept of supply and demand was discovered billions of years ago by biology, long before it was an economic framework. Organisms compete for resources and survive by occupying niches that are uniquely suited to their evolutionary advantages. Similarly, businesses compete for revenue and survive by developing a differentiated competitive advantage. While seemingly robust, eliminating a single species can have disastrous consequences for an entire ecosystem. Likewise, undoubtedly eliminating a specific business sector would have disastrous effects on the overall economy. No matter the size or purpose of a company, each has a uniquely differentiated and important role to play. Businesses that are able to recognize, control, and leverage their role in the ecosystem are able to survive and ultimately prosper in the long term. Business relationships and interactions have evolved following the core features of biological systems.

Since the early beginnings of civilization, businesses have evolved and adapted: independent merchants, to monopolistic private enterprises, and everything in between. Our modern business environment is a consequence of lifetimes of natural selection and survival of the fittest. Therefore, it is not surprising that the parallels connecting biology and business are clear/abundant. Biology is at the heart of business and we believe it would be a mistake to not look towards Mother Nature for inspiration.

“Biology is the mental model for the modern business world.”

— Alix Ventures

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