Startups, Entrenchment, and the Adjacent Possible

Half-baked Philosophy of Startups Ahead

A while back Paul Graham wrote an essay asserting that Startup = Growth. It stuck in my mind because of how vehemently David Heinemeier Hannson of 37signals disagreed with him.

I felt both of them were right, and couldn’t figure out why. Recently, when thinking about the idea of adjacent possibles, I realized why I was so torn between PG’s assertion and DHH’s rebuke. My hypothesis: Startup = Growth applies only to a certain class of opportunities — opportunities that are in new adjacent possible spaces.

Seeing the Adjacent Possible

In PG’s essay he cites Google and Apple as prime examples of startups that won by growing rapidly, fitting his assertion that Startup = Growth. Throughout his examples I saw the theme of adjacent possibles everywhere.

That space of ideas has been so thoroughly picked over that a startup generally has to work on something everyone else has overlooked. I was going to write that one has to make a conscious effort to find ideas everyone else has overlooked. But that’s not how most startups get started. Usually successful startups happen because the founders are sufficiently different from other people that ideas few others can see seem obvious to them. Perhaps later they step back and notice they’ve found an idea in everyone else’s blind spot, and from that point make a deliberate effort to stay there. [3] But at the moment when successful startups get started, much of the innovation is unconscious.
Startup = Growth, Paul Graham

The only part I’d disagree with PG here is the idea of blindspots. What the founders of successful startups notice before other people are brand new territories in space of ideas—the recently opened up adjacent possibles. (A notion popularized in Steven Johnson’s Where Good Ideas Come From. More on this in a minute.) It is not an accident that they saw these spaces. It requires them having worked right on the cutting edge, which is the only vantage point where one can see the adjacent possibles.

Land Grab In the New Adjacent Possibles

In Steven Johnson’s book, Where Good Ideas Come From, he talks about how new ideas are rarely truly new, but are assembled from spare parts. (i.e. ideas that are already available) The people who are working on the cutting edge, who have access to all the pre-requisite ideas, become the conduits for new ideas to come into the world. It explains why new ideas are often arrived at independently by a number of people in a short period of time. It is almost as if ideas are inevitable.

Returning to startup land, this means at any given moment, there are a few inevitable*, world-beating ideas lurking in the adjacent possible. If a startup believes it has struck the adjacent possible, its priority should be to get entrenched before anyone else notices. Rapid growth is the path to entrenchment. That is exactly what PG argues Google and Apple has done, and what every successful startup should do.

First to Entrenchment ??? Success

While startup that achieve first-to-entrenchment are probably all successes, not all successes require first-to-entrenchment. This is where I favor DHH’s argument. Identifying and colonizing adjacent possibles is not the only path to startup success. Growth, therefore, should not necessarily be a startup’s number one priority. 37signals and Mailchimp are examples of a class of businesses that have done well for themselves focusing on differentiation in existing (in PG’s terms, well-picked-over) idea spaces. I doubt anyone would argue with calling them successful businesses.

You could argue that PG wouldn’t consider them startups, but then that would dramatically narrow the definition of startups. That would be to say only ventures seeking to dominate an adjacent possible space are startups. Which you might say is PG’s point.

To which I say, fine. Let’s agree to disagree.

One clap, two clap, three clap, forty?

By clapping more or less, you can signal to us which stories really stand out.