29 November 2018

Did you know that it is mathematically impossible to predict the weather 30 days in the future. Not just “its really hard and we don’t know how to do it yet”, but rather “nobody will ever, EVER, be able to do this no matter how advanced they are”. Chaos theory proves it. Even if we know physics laws perfectly, even if they are completely deterministic, and we have nearly perfect knowledge of where every single atom is on earth, we will still not be able to know whether it will rain or not in thirty days.

In a chaotic system, by definition, small changes get amplified exponentially over time, and unless we make corrective measurements as we go, we will deviate a lot. Chaotic doesn’t mean anarchic - there are still precise laws that govern that system, but these laws make small changes diverge over time. Chaotic doesn’t even mean probabilistic, or stochastic. It is perfectly possible, and easy at that, to have a deterministic chaotic system.

Weather is determined by the laws of physics, and is still chaotic. And most systems we encounter in life are. Society as a whole is chaotic. The stock market as well. And my main point today - building a company is a very chaotic experience, no matter how organized and diligent you are.

When building a company, things invariably will deviate from plan. Projects take longer. We discover new opportunities. Things happen to people. Personalities change. Morale changes. Problems and opportunities alike emerge from places we would have never expected initially.

There is a drift. A wind of change. Sometimes it’s quiet, sometimes it’s gusty. Over time, this wind of change causes expectations to deviate from reality. What was our plan, and our vision will not happen that way. The problem that we are solving will turn out to be way bigger, or way smaller than we expected, and we’ll adjust to something more appropriate.

Some people, such as VCs and investors, might think they can predict early on if a company will be successful. And many may have a good track record, having had successful exits and gained a lot of money. Yet, if you ask them what do the look for as indication of success, they have varied and different opinions. They all profess different leading indicators. They might look at the the founder’s experience, or potential, or attitude, or whether the business model matches the new hotness, or whether the vision is compelling. Those things all matter. Yet they matter far less than everyone gives them credit.

All of these indicators can change. The founder’s attitude and abilities can change, the trends can change, and the vision will almost certainly change. None of these are absolute. None of them are static. When we hear the phrase “vision” in corporate context, many of us roll our eyes, and consider it yet another instance of corporate bullshit. It’s meaningless, because it will be blown away by the winds of change.

What is there to do? Is it all luck? Not all. Definitely some. Quite a bit. They say luck favors the prepared mind. In my opinion, the prepared mind is agile and humble. The prepared mind knows that everything will change. The value delivered might change as the customers change their behaviors. The team’s morale can change at the smallest wins or loses. Partnerships and deals change. The competition changes. The technology changes. Even some of the values and principles which guide the team can change.

We don’t know what the future will bring. But at least we know that.