Thinks 510

Anticipating the Unintended: “Spontaneous orders aren’t planned by anyone. There is no intentional coordination of actions by any external agent. Every participant acts in their individual best interest for their own objectives. However, these individual actions aggregate into a pattern of their own. It is the ‘unintended order of intentional action’ that emerges on its own and it adapts to the ongoing changes. Language is a classic example of this. No one individual could have designed it. There’s no central design of associating a sound with an object or an emotion. It evolves by the attempt of separate individuals trying to solve the problem of communicating with one another. The sounds that are easy to use and adopted by most individuals evolve into the lingua franca of the community. Language is ‘the result of human action, but not of human design’. As the language becomes more widely adopted, there are attempts to formalise its structure and syntax. As these structures become more rigid and people are forced to use a language in only a certain way, it begins losing its flexibility and its utility. People find a more flexible mode of communication and a new order emerges. A new language of the people is born. This is how Latin, Sanskrit, and Persian continued to be the languages of the church, court or the temples but the continuing rigidity of their grammar and their top-down imposition on people led to their decline. Spontaneous order killed them off.”

John Reed: “When you first start to study a field, it seems like you have to memorize a zillion things. You don’t. What you need is to identify the core principles – generally three to twelve of them – that govern the field.” [via Shane Parish]

Gavin Baker: “Today’s unprofitable tech companies are so much better than the ones back then. Many of them are Software as a Service companies where we know that the business model works. They have immense control over their P&L. You have seen some of them take their free cash flow margins up 80-90% in two quarters. They can be profitable whenever they want. They’re making a conscious trade-off between growth and profitability, and when they tilt towards more profitability, they don’t stop growing, they just grow slower. So it’s wild to me that you’ve had a move comparable to the year 2000 crash in non-profitable tech companies. Their forward multiples have compressed at least as much if not more, but they are great businesses, they’re not missing their numbers…David Sacks, a co-founder of the venture capital firm Craft Ventures, said it aptly: For around twenty years, all these companies had to do was to take any business process that’s done on Excel or uses a fax machine, create a web or app-based software version of that business process, run it on AWS – and presto: you have a multi-billion software applications company. Obviously there is more to it than this oversimplification, but the point stands that it has become easier to build application software and that world has steadily gotten more and more competitive on a category by category basis.”

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.