Successful companies are creators of value. It occurred to me that some of the best entrepreneurs effectively solve a problem by connecting multiple systems and streams of value.
- In the case of Uber, there was a complex co-ordination issue that involved connecting riders and drivers but also balancing the economics of the transaction.
- SpaceX connected hundreds of moving parts in the rocketry business – from radios (they built their own), telemetry, navigation, reusability, engines – using a combination of vertical integration and clever design and manufacturing, creating enormous value.
- SONOS was able to connect value streams from audio hardware to playback software, to music quality, to listening convenience for the consumer. Wherein music playback software was quickly being dominated by Spotify, they intelligently partnered with Spotify to allow for seamless casting.
etc.
My point here is that aside from the usual barriers to entry, it is harder – but is typically amplifying in value when you connect multiple systems, and streams of value.
In solving a problem, I ask myself – are there multiple systems or streams of value to be connected together, in a way that the sum of the parts is atleast 100-200x more valuable than any singular part?
Conversely, it seems it would be hard to build long-term value by leveraging a single stream of value.
My first introduction to Joi Ito’s work came via his investment in our online gaming company, GameVentures in Singapore a few years ago. Since then, I’ve followed his work closely as he’s just generally awesome. Loved this particular blurb from a recent interview.
Ito: Making maps is a long and very expensive process, and the idea of compasses over maps is that one should have a goal, vision, or long-term, detailed plan, especially as the world is complex and always changing.
Somebody once told me a story about a film director who said that the difference between a great and a not-great film is that you have an image of what the movie is in your head. When everyone reads a script, everyone can imagine a completely different movie.
A great director’s job is making sure that everyone on set is making the same movie in their heads, whether it’s a craft services person, a driver, or the director of photography. That’s the idea of the compass. It’s that we know where we’re all trying to go.
You can also look at Wikipedia, an organization with neutrality as a stated goal. The community believes and buys into the organization’s whole ideology, but it also allows individuals to all do different things while those values hold the entire project together.
A lot of organizations and traditional, industrial-age institutions have been about plans, structures, and preparation, but we’re all aware that agility, speed, and the ability to pull from a network is much more important in order to all make the same movie.
Full interview with Joi here.