Sunday, October 27, 2013

Why every entrepreneur should understand Evolution.

Insanity: doing the same thing over and over again and expecting different results. - Albert Einstein
100% business (successful or failed) is following the basic principles of evolution.

Take A(H1N5) virus commonly known as bird flu virus. It is hard to create a vaccine because of the continual mutation of the virus. What this means is the virus (and most RNA based virus) is continuously changing its genetic structure to survive in the wild where scientists are trying to make a vaccine or anti-dote for this. People will try to get rid of this virus for ever- but as long as this virus is successful adapting those efforts it will be very hard if not impossible to create a vaccine. To be successful at this scientists will have to create a vaccine based on the future genetic structure of the virus not the current genetic structure. But if for any reason there is something in nature that can neutralize the one possible strain of the virus and the virus family accidentally mutates to that strain it is out of business automatically even though the compotators (scientists) do nothing. This is actually happening all the time through genetic recombination. One part of the virus family is mutating to a form of genetic structure and dying or changing host to live. [1][2]

The slight change is gene in all forms of life is a natural process. No child is 100% same as their parents or even any combination of the parents genes (which is huge set of combination by the way) [3][2]. Now when a change occurs in an offspring of a life form, three things can happen- 1) it has no effect on the life of the new born child 2) it is affecting in positive way or 3) it is affecting in the negative way on the kids life.

Now we may think that it may be safer if there was no change. But it is not true. The environment is changing continuously and change in other competitive life forms may become dangerous for it. So, if a life form has adapted and does not change over time it may survive if the environment change does not become harmful or competition ignores it or co-exists with it or does not exist in the same geographical region which is highly unlikely.

Sometimes it does not help animals to be bigger, stronger or smarter. Dinosaurs were very big and strong. But they could not survive the environmental change because of a large asteroid collision with the earth [4]. But cockroaches survived the event successfully[5]. Neanderthals were stronger and smarter than us (homo sapiens). But they could not make it because of various environmental reasons and we, the competition, adapt the environment much better without even knowing that making us the fittest in that market [6]. Without knowing part is my idea- I guess there were not much scientists back then who would understand these things :). I guess if they would change a little start eating vegetables like us when there was no meat available to eat, world history would probably different.

Sometimes animals move to new geographical area when it becomes harder to live where it was living or for the search of better location. This again can change a lot of things. The animals those still are living the same area may find it harder to live because they were depending on the species that left the area. This can be direct - like they used to eat that species or it was part of the food chain directly or indirectly. Or indirectly the way bees help a majority of species on earth for their role in pollination. Or if a predator leaves an area some other species may find it easier to live in the area. And the system on new location where the species migrated can also be affected a lot. It can become a predator for animals living there or become food of some other species. It is going the change that system in some way or other which may be helpful or harmful to other species living in that area.

Over generation some experience becomes natural instinct. We are afraid of dark from the experience that it is hard to get prepared without seeing danger coming. We are more comfortable sitting under a tree keeping the tree in our back. If something approaches towards eyes it automatically closes without we even get time to think about it. Those has become part of our instinct over a long time.

So, that's the basic idea of evolution. Life forms change and sometimes they move around. Some change is good , some change is bad and some change may have no effect at all. Environment has a lot of effect on survival of a species and their offspring. Which change is good and which is bad is very hard to know in advance.

In the environment many different type of species are living happily. Some of them are helping one another in some way to survive. Some are not helping some others but is not hurting either. Those are also sharing the earth happily.

Most of these concepts are applicable to businesses. Business operate in the large environment of the market place. Some are dependent on each other. Some are competitors and some are living without affecting some others in a completely unrelated market segments.

In business it is hard to know what thing will really work. In one article Paul Graham wrote about Yahoo did not buy Google and Facebook (they offered less than founders were expecting). If they would know they could be several times bigger by now. But we can not be sure. Change of environment can change everything. Moving facebook or google inside Yahoo could have killed them as well.

Not changing is not good either. When a business adapts a market and becomes profitable as much that it can survive, if nothing changes it may live that way for ever. But market will change. New competition will come. Market change sometimes may help a lot and makes the business more profitable. Or it may become difficult for the business to exists. Dinosaurs will extinct even though cockroaches will survive. Think about Kodak- they were smarter than compotators- they actually invented the digital camera and had the patent [7] but since they did not change their old film based camera business to adapt the new technology they are now almost out of business. They did not want to kill their cash cow with a competition. But they did not realize that someone else is eventually going to do that. Apple did opposite of what Kodak did. They killed the Apple I, Apple II series with their new Mac series of computers. It is always better that you kill your cash cow instead of letting someone else killing you. You must adapt to new marketplace even it means killing your existing profitable business. Or at least create something hybrid that together makes you stronger. Microsoft is probably in the process of doing this with their Azure platform.

Being stronger does not help much either. Google had all the resources they needed but orkut still lost to facebook. Now since google is continuously trying to do something else it is possible that market may change in some way to favor google and they get to the business. If one of your strategy fails you do not need to stop there unless you are unable to survive. Microsoft tried to gaming console market for long time before they get it. (I am not sure though about increasing the price point of their new console and the decision that old games from previous version of the console to be incompatible - which they may change before release). Microsoft is now trying the same with their surface tablets. Whether something will work or not is hard to tell. But trying many different things is the only way to increase the probability until you are successful.

It is probably good to know what other people have tried. Whether it worked or not it could save your time. If it worked and the marketplace is exactly same it may work for you also. Or you may need to make some slight modification. If something did not work its also a lesson. Like natural instinct we should know the obvious things. Even someone is smartest guy or girl on earth s/he does not have the luxury of trying everything is his or her lifetime. So many people do not try to avoid the obvious way of failing in a business- making something that does not solve any real problem that are painful to have and people will pay to get rid of the pain or there will be at least lot of users and makes it easy to make money indirectly. There is no point doing something that does not solve anyone's problem or make anyone hipper than before using the product or service. This should be natural instinct in business.

As a last note be good with everyone and wish good for everyone. If one of your competitor or all of them becomes successful it could change the market that could help you to own your own business. I am not sure why Google is not trying to uphold their motto of not being evil anymore, but you almost never need to be evil to be successful. Being evil will create enemies and sometimes in futures those enemies can become stronger than you and kill you. You never know the future. And cheating and being unfair will ultimately hurt you. Nobody will trust and you can not survive alone no matter how strong you are.

[1]: [2]: [3]: [4]: [5]: [6]: [7]:

Disclaimer: I am not an expert in genetics or entrepreneurship. I am merely a student of these subjects. My knowledge is also evolving continuously.

I would appreciate if you find any concept or information to be wrong in any of my blogs and let me know through comments. And please excuse my bad grammar and typos specially for new articles.

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