How chaos shapes industries and creates opportunities
Packy, this is an incredible piece that I immediately shared with our entire team and it's spurned a few hours of conversation about how we are organizing our company's mission, values and even roadmap. We follow first principles of physics at Jupe (e.g. physics does not say that housing can not be off grid so all housing that we build at Jupe will be offgrid, forever). Our long vision is to jailbreak housing from constraints of access and place (and then create communities) and we're seeing a mass entropic force, accelerated by COVID, which is the move from office to WFH. I've seen numbers consistently around a 20% jump in the number of permanent WFH employees, even once a vaccine is widely available. This, by effect, will increase the entropy in the places that the top talent concentrates (big cities). It seems to me like going to Mountain View every day is a reverse entropic function bringing people back together, where WFH promotes entropy. So, we're talking about wrangling atoms and personalities and work all at once. What are your thoughts on COVID/WFH growth and if this is/is not an entropic phenomenon and if it's possible to be wrangled. Thank you again for the insightful piece. Jeff.
Entropy Theory – It's a mindset to look at business this way and I have had discussions in the past where I was schooled that business has nothing to do with....well....The Second Law of Thermodynamics.
I was excited to read that this perspective also exists elsewhere. I captured my thoughts a couple of years ago in this blog post: https://medium.com/@craabit/why-your-business-is-depressed-fdb25af7a4dd
But obviously not nearly as detailed and thought-out as your piece. I also used the thought as the theoretical foundation to further explore..ahem...the practice of creating reality. Which might not have helped either to add credibility to the idea of "business entropy" in discussions with more mainstream thinkers.
In any case, really great read and I'm looking forward to more of this!
Intriguing theory! I think it works well alongside the Innovators Dilemma, but the Entropy image appeals to my STEM background.
I think the angle I see most clearly to apply Network effects to Entropy Theory is TikTok vs. FB. FB wrangled the Entropy of digital communication and "social record-keeping", but introduced Entropy of the Never-Ending Feed. ByteDance just capitalized on the innovation in smartphone cameras/processing to apply the Never-Ending Feed to mobile-optimized video. While FB intended it's network effects as the moat to protect against disruption, it unintentionally released the Never-Ending Feed into the world, enabling TikTok.
A perhaps most interesting but less fleshed out example would be digital nomads. Digital nomads are wrangling the Entropy wave of citizenship, despite localized network effects. People stay put because their friends & family are around them. Citizenship (tribes wrangled villages for war, states wrangled villages for wealth, and countries wrangled states for production) is an intriguing entropy wave of ex-pats, nomads, dual-citizens, and multi-nation families. Perhaps digital nomads are those creating more entropy, in spite of network effects.
Really interesting theory would love to read further development on this. Your article made me think a lot and it is really fascinating. I was thinking that many companies were started to make things more efficient which means reducing the chaos. I was wondering that why does solving for efficiency which ideally should reduce chaos leads to more chaos in the end and thus increasing the overall entropy of the system.
Does this happen as creation of efficiency at one place leads us to notice inefficiency at other?
Interesting and intriguing piece!
I talked about something similar here. I guessThe times of increased entropy is when the individual rules and decentralisation reigns supreme which is then followed by centralisation led by entropy wranglers. Followed by another wave of increased entropy (decentralisation). It follows a cyclical pattern like you said.
Wow! I am glad I came across this post by looking up the meaning of the word entropy. I work in real estate and this helped to create a lot of structure in my thinking.
Thank you so much for sharing this! SO GOOD!
...Facebook and Google 40¢ of every dollar they raise. This is where the revolution will be. Thanks.
I like companies that do phase shifts, entropy positive to entropy negative, back and forth or vice a versa. I think those could be stages of growth. We sort information, that generates more information. Like google search creating google ads. Or we aggregate information, then sort it like in your examples. But yeah entropy theory and information theory, I think buds. Same coin.
Amazing story, Packy - you might enjoy this - https://jamesclear.com/entropy
<snip> Aggregation Theory describes how platforms (i.e. aggregators) ... </snip>
/me; you seem to be equating aggregators as platforms. the way I understood ben's aggregation theory is that; platforms are the mirror reflections of aggregators. essentially platforms and aggregators are blind spots to each other! at the least they are not the same though the term 'platform' is very loosely used in the industry
- with the distinction of platforms and aggregators, i was thinking about how can 'platforms' fit into this entropy theory in the scheme of [increasing entropy (worst), creating entropy (better but too early), or wrangling entropy (best)]? I was thinking - if a generalist (multi-purpose) platform is creating entropy > a specialist platform can wrangle that entropy. my thoughts are fuzzy but wanted to put it out there if you should be willing to explore further
- you barely touched on abundance & scarcity; you may want to look at essays by Alex Danco @ medium, which can help you connect back to entropy theory
Interesting! I am wondering if this entropy theory could be applied to cases outside of tech too, e.g. your personal life. For example, right before college I would say that our minds are in high level of entropy - we feel lost, confused, and relationships/interests are wide. Then comes college and wrangles these confusions into a clear formal education system. However, soon enough you graduate and you are a mess again.
And college is just one of many systems that could come in here to organize entropy. Besides college, there is surely work, books, and after all language.
I want to learn more so refute and educate a flickering thought if you have bandwidth.
Thanks for this article.
So does fine-graining everything into more chunks increase the entropy, esp in stat mech?