twointwomillion
New member
As some of y’all may know, I got two bunnies: Mango and Dino.
Like most bunnies, in their opinion, carrots are the most glorious thing ever invented ranking right up there with air travel, vaccinations, the internet, and the blue bagged crispy M&M’s.
FIGHTING OVER THE SAME CARROT
Some days I put a bunch of carrot slices on the floor and call them. Sometimes they wrestle for the same piece, totally ignoring the rest of the enormous pile, and other times they eat their half.
Naturally, I tried to prevent that behavior and quickly learned that if I put two portions on the floor, a few feet apart, and put Mango and Dino at their respective little mountain of carrots, they’d eat peacefully (with all the grace of a fluffy, pointy-eared, wood chipper).
Conversely, If I didn’t nudge their behavior, they’d run toward the same portion. One following the other, petrified of missing out.
IN A SCARCE ENVIRONMENT THAT WORKS
It seems like silly behavior, especially when there are more than enough carrots to go around. At least make sure you’ve both eaten plenty of carrots before you start fighting. Perhaps over the last piece.
Of course, evolution isn’t concerned with what appears silly. Evolution is simply a kind of Markov chain, rewarding certain organisms with a higher probability of passing along their genes than others, in a given environment.
In a world where food is scarce, organisms that are biased toward aggressiveness/assertiveness will have a higher probability of survival than ones that are biased toward agreeableness.
FIGHTING OVER CARROTS IN BUSINESS
Almost all founders, CEOs, angel investors, and VC firms make the exact same mistake.
There’s a massive bias toward going where the crowd is. The theorem is as follows:
‘’If everyone is doing it, it must be a good idea. Inversely, if no one is doing it then it must be a bad idea.’’
This is precisely the kind of reasoning (anthropomorphizing) that Mango and Dino displayed.
But again, this is only true in an environment that’s scarce (1 carrot). Since building the future relies on building things that improve people’s lives, that premise is false. We’ll never run out of ways to improve people’s lives. (And if you disagree with that, at least not for the foreseeable future.)
RADICAL DIFFERENTIATION IS NOT OPTIONAL ANYMORE
This is why we have to practice what the father of modern branding theory Marty Neumeier coined as radical differentiation. You want to do something that’s both good AND different. [1]
In school, you’re not allowed to cheat, but in business you are. If you don’t like the test (the problem you’re trying to solve), you can simply change it (pick a new one). As many times as you like.
So instead of fighting over the same carrot, figure out what everyone is doing and try the opposite. What problems is no one addressing? What existing solution to a given problem can be made ten times better? What is an area no one is paying attention to? If everyone in the industry is focusing on X, can you focus on Y instead?
Real differentiation!
Armed with this new found knowledge we can construct the following theorem:
More on this in Network Effects, Neutral Network Effects, and Anti-Network Effects
ON COMPETING WITH THE BIG BOYS
If there’s already a strong #1 and #2 in a given market, it’s vital that you DO NOT compete with them on their terms!
Case in point: Virgin Coke v. Coca Cola (Smith, 2017):
So much for the ‘’Open Happiness’’ propaganda.
Instead, look for a way to compete on something where you have the advantage. And because everyone is so impacted by herd mentality, groupthink, and loss aversion, this is easier than it seems. It takes balls and being awake (the quality of not being reactionary and on autopilot), not smarts.
And remember that just like you can change the test as often as you’d like (pick a different business or product), you’re also allowed to take the test as often as you want (trying new designs as long as your runway doesn’t run out). [1]
That means you should treat it exactly the same as behavior design. You come up with a design, test it, and if it doesn’t work you iterate based on what you’ve learned and try again.
No feeling bad, no being ashamed, no being mad. It’s simply trying something and tweaking it.
Simple.
NOTES
[1] I had a couple of wantrepreneurs trying to strawman me on Reddit a few months ago during the beginning of COVID. I had written a piece of advice which was essentially saying: ‘’It’s not gonna be easy but you can find a way to either mitigate loss or capitalize on this situation.’’
That was unacceptable for some people that do not believe in extreme ownership as I do. They argued the woe is me mentality and that you’re basically resigned to crying in a corner. Something I refuse to accept.
So they tried to come up with impossible to fix businesses. But remember, you are allowed to change your damn business! (Also, you chose that business model in the first place.) If you can fix it and you want to fix it, by all means, explore that. That’s a large part of what Y&F does. But if you’re a record label in the time of Napster or a carriage company in the time of cars, why not move on?
Disruptive innovation nearly always comes from outsiders precisely for this reason. There’s nothing physically stopping companies from introducing new technologies or business models, but they don’t want to put themselves out of business. Change is scary, the status quo familiar. So they fight it until someone else does it for them. Almost everything you see around you is the result of a new company disrupting an old one, not the old one innovating. Innovation within companies is mostly a psychological problem, not a technological one.
REFERENCES
Neumeier, M. (2020). THE GOOD/DIFFERENT CHART — MARTY NEUMEIER. MARTY NEUMEIER. Retrieved 2 October 2020, from https://www.martyneumeier.com/the-gooddifferent-chart.
Smith, E. (2020). Virgin Cola: Richard Branson’s Greatest Failure?. Medium. Retrieved 2 October 2020, from https://medium.com/@shortformernie/virgin-cola-richard-branson-marketing-failure-8a470ced7815.
Youngling, R. (2019). Network Effects, Neutral Network Effects, and Anti-Network Effects — Youngling & Feynman. Youngling & Feynman. Retrieved 2 October 2020, from https://www.younglingfeynman.com/essays/antinetworkeffects
----------------------
Appreciate you reading! If you enjoyed this essay I write about entrepreneurial science here: https://www.younglingfeynman.com/essays/featured
Like most bunnies, in their opinion, carrots are the most glorious thing ever invented ranking right up there with air travel, vaccinations, the internet, and the blue bagged crispy M&M’s.
FIGHTING OVER THE SAME CARROT
Some days I put a bunch of carrot slices on the floor and call them. Sometimes they wrestle for the same piece, totally ignoring the rest of the enormous pile, and other times they eat their half.
Naturally, I tried to prevent that behavior and quickly learned that if I put two portions on the floor, a few feet apart, and put Mango and Dino at their respective little mountain of carrots, they’d eat peacefully (with all the grace of a fluffy, pointy-eared, wood chipper).
Conversely, If I didn’t nudge their behavior, they’d run toward the same portion. One following the other, petrified of missing out.
IN A SCARCE ENVIRONMENT THAT WORKS
It seems like silly behavior, especially when there are more than enough carrots to go around. At least make sure you’ve both eaten plenty of carrots before you start fighting. Perhaps over the last piece.
Of course, evolution isn’t concerned with what appears silly. Evolution is simply a kind of Markov chain, rewarding certain organisms with a higher probability of passing along their genes than others, in a given environment.
In a world where food is scarce, organisms that are biased toward aggressiveness/assertiveness will have a higher probability of survival than ones that are biased toward agreeableness.
FIGHTING OVER CARROTS IN BUSINESS
Almost all founders, CEOs, angel investors, and VC firms make the exact same mistake.
There’s a massive bias toward going where the crowd is. The theorem is as follows:
‘’If everyone is doing it, it must be a good idea. Inversely, if no one is doing it then it must be a bad idea.’’
This is precisely the kind of reasoning (anthropomorphizing) that Mango and Dino displayed.
But again, this is only true in an environment that’s scarce (1 carrot). Since building the future relies on building things that improve people’s lives, that premise is false. We’ll never run out of ways to improve people’s lives. (And if you disagree with that, at least not for the foreseeable future.)
RADICAL DIFFERENTIATION IS NOT OPTIONAL ANYMORE
This is why we have to practice what the father of modern branding theory Marty Neumeier coined as radical differentiation. You want to do something that’s both good AND different. [1]
In school, you’re not allowed to cheat, but in business you are. If you don’t like the test (the problem you’re trying to solve), you can simply change it (pick a new one). As many times as you like.
So instead of fighting over the same carrot, figure out what everyone is doing and try the opposite. What problems is no one addressing? What existing solution to a given problem can be made ten times better? What is an area no one is paying attention to? If everyone in the industry is focusing on X, can you focus on Y instead?
Real differentiation!
Armed with this new found knowledge we can construct the following theorem:
More on this in Network Effects, Neutral Network Effects, and Anti-Network Effects
ON COMPETING WITH THE BIG BOYS
If there’s already a strong #1 and #2 in a given market, it’s vital that you DO NOT compete with them on their terms!
Case in point: Virgin Coke v. Coca Cola (Smith, 2017):
So much for the ‘’Open Happiness’’ propaganda.
Instead, look for a way to compete on something where you have the advantage. And because everyone is so impacted by herd mentality, groupthink, and loss aversion, this is easier than it seems. It takes balls and being awake (the quality of not being reactionary and on autopilot), not smarts.
And remember that just like you can change the test as often as you’d like (pick a different business or product), you’re also allowed to take the test as often as you want (trying new designs as long as your runway doesn’t run out). [1]
That means you should treat it exactly the same as behavior design. You come up with a design, test it, and if it doesn’t work you iterate based on what you’ve learned and try again.
No feeling bad, no being ashamed, no being mad. It’s simply trying something and tweaking it.
Simple.
NOTES
[1] I had a couple of wantrepreneurs trying to strawman me on Reddit a few months ago during the beginning of COVID. I had written a piece of advice which was essentially saying: ‘’It’s not gonna be easy but you can find a way to either mitigate loss or capitalize on this situation.’’
That was unacceptable for some people that do not believe in extreme ownership as I do. They argued the woe is me mentality and that you’re basically resigned to crying in a corner. Something I refuse to accept.
So they tried to come up with impossible to fix businesses. But remember, you are allowed to change your damn business! (Also, you chose that business model in the first place.) If you can fix it and you want to fix it, by all means, explore that. That’s a large part of what Y&F does. But if you’re a record label in the time of Napster or a carriage company in the time of cars, why not move on?
Disruptive innovation nearly always comes from outsiders precisely for this reason. There’s nothing physically stopping companies from introducing new technologies or business models, but they don’t want to put themselves out of business. Change is scary, the status quo familiar. So they fight it until someone else does it for them. Almost everything you see around you is the result of a new company disrupting an old one, not the old one innovating. Innovation within companies is mostly a psychological problem, not a technological one.
REFERENCES
Neumeier, M. (2020). THE GOOD/DIFFERENT CHART — MARTY NEUMEIER. MARTY NEUMEIER. Retrieved 2 October 2020, from https://www.martyneumeier.com/the-gooddifferent-chart.
Smith, E. (2020). Virgin Cola: Richard Branson’s Greatest Failure?. Medium. Retrieved 2 October 2020, from https://medium.com/@shortformernie/virgin-cola-richard-branson-marketing-failure-8a470ced7815.
Youngling, R. (2019). Network Effects, Neutral Network Effects, and Anti-Network Effects — Youngling & Feynman. Youngling & Feynman. Retrieved 2 October 2020, from https://www.younglingfeynman.com/essays/antinetworkeffects
----------------------
Appreciate you reading! If you enjoyed this essay I write about entrepreneurial science here: https://www.younglingfeynman.com/essays/featured
Truth be told, I was nervous publishing it here because I worried it would be received poorly.