53 chunks · 43 episodes
Great piece on growth and churn from Andrew Chen. Churn is a percentage of the user base, which means it compounds–as the user base grows, churn also grows, super-linearly. Your product has to have an intrinsic compounding loop (e.g. network effect) that is stronger than the churn loop to beat it ov
If everyone has the same laws of physics, then one participant getting a slight edge in a compounding loop doesn't matter. Yes, they are ahead of the others in a compounding loop… but the others could have the exact same compounding loop. And if the other worked 10% better than the first competitor,
Linear systems beat compounding systems… but only at the beginning. Compounding loops take time to "warm up". For a critical period at the beginning, the linear system will beat the compounding system. Proprietary internal investment from one entity is linear. Open external investment in a swarm is
For aggregation to occur, you need an option that stands significantly out from the crowd for an extended period of time. It needs an "edge" that draws incremental users into it instead of other options. By being prominent it becomes a schelling point. If there is a network effect to the option, the
Compounding loops have balancing loops that create an asymptote. They bring a runaway effect into balance. If there weren't a balancing loop, then the compounding loop would quickly go to infinity and swallow the whole universe. A balancing loop often shows up for proasic, even automatic, reasons, l
A useful lens for products: primary vs secondary use cases. I wrote this up in an old public-but-not-publicized essay. A primary use case is one whose expected value for a user exceeds their expected cost. It's "expected" because it's based on users priors for how the feature will work, based on: Ho
Many projects have attempted a new, decentralized model of applications. But none of them have had a significant, wide-scale impact. After looking through many, there are a number of recurring patterns I see: 1) No security model For composing untrusted components, they'll "figure it out later". But
People naturally invest time and effort in the entities and ideas they suspect will be powerful. For example, currying favor with people they think are powerful or might become powerful. It's a kind of emergent "yes, and" survival of the fittest / most powerful. It's not so much that this powerful p
Too-short time horizons lead to bad decisions. Imagine a given plan as being a path, where the height is the value of that point. Imagine comparing two possible paths: one that has a slight linear increase, and one that has a very slight dip, but then a compounding improvement, and is quickly orders
The default state of a city is alive. The default state of a company is dead. Why? In Scale: The Universal Laws of Growth, Innovation, Sustainability, and the Pace of Life in Organisms, Cities, Economies, and Companies, physicist Geoffrey West shows universal scaling laws that seem to show up everyw
There are two fundamental skills/mindsets that together give rise to self-bootstrapping ability: 1) An openness to the idea that the world is not single-dimensional and black and white, but multidimensional and shades of gray. Surprising information is a signal that there might be a shade of gray or
I'd rather have good execution on a great curve than great execution on a good curve. The curve is the internal dynamics of the solution/context (e.g. network effects, PMF). Once found the curve is almost exogenous to the execution. Execution can only change the results above or below the curve by a
Coherence means that the whole is greater than the sum of the parts. Coherence can be cheap ("automatically cohering") or expensive to create. The expensiveness of the coherence is how much effort must go into coordination to get a coherent result. Coordination gets super-linearly more expensive as