The Red Queen Effect | Brand, Business & The Biological System
The Red Queen Effect
“The evolution-by-natural-selection model leads to something of an arms race among species competing for limited resources. When one species evolves an advantageous adaptation, a competing species must respond in kind or fail as a species. Standing pat can mean falling behind. This arms race is called the Red Queen Effect for the character in Alice in Wonderland who said, “Now, here, you see, it takes all the running you can do, to keep in the same place.” Shane Parish
The Red Queen Principle means we can’t be complacent or the rate at which the world moves will leave us behind. Simply, stagnation and defeat are one and the same, but interestingly movement does not necessarily render progress, it renders stagnation, effectively. Thus, in order to move ahead, we must not only move quickly, we must also evolve to the changes in the systems that govern our domains.
In brand and business this happens all the time. There are countless examples of where a business might have to keep spending more time, money or any other resource, just to hold their current position. Arjun Sethi writes about this incredibly eloquently in his essay “Units of time are the new currency”.
And while the case can be made that The Red Queen effect can take place in many facets of a business, I do no think that their is any place more pervasive for todays brands than CAC . Acquiring customers through ‘easy’ distribution channels like buying cheap facebook ads or something along those lines will certainly drive top line revenue and you might able to model out a nice LTV. But, is that truly indicative of future growth or are you just buying the ability to stay in the same place? Again, someone who speaks about this much more eloquently than I, is Bill Gurley in his post “The Dangerous Seduction of LTV”
Ground Truth and Three paths to brand evolution and business growth
Firstly, to beat the Red Queen Effect you have to know what your destination is, and it is not a revenue figure, it is not DAU or MAU, those are important milestones but they are not the motivational catalyst for the movement of a group of people towards a common objective, which is of course the internal culture of a business. So, the simple heuristic before you even begin to run or move is understanding what is your north star?
Once you understand your north star, like in Tesla’s case it is to “ To accelerate the advent of sustainable transport” from their they can appropriately choose were to place their efforts in beating the Red Queen Effect.
Three paths to progress
- Stability
Stability is the path to progress by betting on and improving upon the things that do not change. The business universals. A great example of this is Amazon.com- a good product at a lower price will not change, faster shipping will not change, great customer support will not change. Being best in class at the things that don’t change relative to your north star have a compounding effect.
2. Catching the wave in an authentic manner
Catching the wave in an authentic manner is extremely important, it is the collective consciousness shifting tide to an emerging mental construct manifest through a physical good, digital good, memetic lens. Brands can out progress the queen (competition) by authentically catching the wave, this means that the brand or business must serve their customers this new paradigm shift in a form that fits their north star. What if McDonalds had a sub brand that was the fastest, most convenient, source of plant based burgers and foods?
3. Innovation through talking to users / customers.
One way to out pace the queen is not to race with her at all, and that is what innovation is. It is choosing not to compete by understanding your customers better than they understand themselves, it is talking to them and observing them in such a detailed manner that you can serve them what they need before they need it. This business and brand antifragility, the core question every quarter should be something along the lines of if we were starting again today and wanted to create a new category — how would we do it?
Fin.
