We Built Our Company Around Chaos, Here’s Why

Butterfly Effects, Network Theory and the Power of Power Laws

Statistically Wrong

Let’s start with a fun term: Deterministic Nonperiodic Flow. Alright, now that we’ve gotten rid of the lazy readers, we can talk about the good stuff. In the 1950’s, a man named Edward Lorenz was in the process of trying to build a statistical model to better predict the weather. Even though autocorrect didn’t exist in those days, he managed to type one seemingly unimportant number wrong and quickly realized that it vastly altered the entire forecast. Soon after, he coined a new term: The Butterfly Effect. What Edward had discovered was that small differences can compound (fancy word for mix) to create large scale changes that completely alter the end result. In other words, you change one number today and your model tells you that it’ll rain caterpillars tomorrow.

Here’s Martin’s explanation: Chaos Theory is “when the present determines the future, but the approximate present does not approximately determine the future.”

So…

So the point is that, while we can be certain that 2+2=4, the more complex our systems become, the less we can determine the certainty of future events. Chaos isn’t governed by simple math, it’s governed by power laws — also refered to as Pareto Princple or 80/20 rules.

At the end of the 1800’s, Italian economist Vilfredo Pareto noticed that 80% of Italian land was owned by 20% of the people. Soon after, the rule began being tested across various fields —

Software: Microsoft found that 80% of complaints stemmed from 20% of their code

Sports: 20% of workouts and training accounts for 80% of the end results

Sales: 20% of your customers account for 80% of the profit

Music: 20% of artists account for 80% of what actually gets listened to

Famed venture capitalist (and Trump supporting asshole) Peter Thiel even based his awesome book Zero to One on the principle that 80% of a VC firm’s profits come from just 20% of their investments.

Think of this guy as the 20%:

Power Up

Now just to be careful, you have to note that power laws are not entirely 80/20 based, which is why Power Law is a much more appropriate term. In many cases the distribution is often 90/10 or even less. Even more important to note is that Power Laws are fractal. This means that these patterns repeat endlessly — the simplest way to describe this is using Instagram. 20% of Instagram users account for 80% of the content that people like. Fractal means that Justin Bieber and other extreme-celebrites are part of 20% of that 20%. So the smaller you look down the power law, the more powerful those percentages get. Bieber will get 10 million likes while Kobe Bryant gets 1 million likes and you get 50 likes. But this is ignoring the point…

The F@#$ is the point?

The point is that as systems become more complex, chaos theory begins to take hold. The more that chaos theory is in effect, the more that power laws apply. That’s where we get to building our company Laylo, which is a music discovery platform built entirely around these concepts. You see, the distribution of music is very much built around power laws. 20% of people hunting down great music are responsible for what 80% of people are listening to. A great example of this is radio stations. While you may believe they are dead, the truth is that they’re still vital for turning your favorite new band into the next 1 Direction. That’s because radio stations have effectively bought themselves into the 20%. They have access to the ears of billions of people around the world and thus account for that 80% of what’s being listened to.

At Laylo, we’re trying to take this power back. We think that you’re just as important for the discovery of great music as anyone else and we want you to be able to prove it. Everyone has those friends that make the playlists, drag you to that new artist’s concert and pay $100 for that white hanes T-shirt that Kanye’s selling.

Lay Low, until you don’t

With Laylo, we’ve built a system that let’s you prove that you’re worthy of being part of the 20%. Now you can prove that you really did find Beyonce before she was Bey. Even better, you can prove that you spread her music to 50 of your friends who then spread it 10,000 of theirs who then took it global. In the age of social networks we’re able to build a system that combines power laws, chaos theory and network effects into a platform built around music lovers.

Screw radio stations. Screw sitting back and watching your favorite new artist blow up while getting no credit. It’s time to become the Power in the Power Law.

Join Us

If you want to connect with your fans, are a superfan yourself or just dig what we’re doing, come join us. Artists can get access to their dashboard by heading to app.laylo.com and clicking Let’s Go!