incompleteness for startups

Incompleteness for Startups

By Max Skibinsky

Few Essay's

Startup-Russia.com

1. The Ultimate Theorem

Gödel 1st Incompleteness Theorem

•  Ultimate Theorem •  Why everything evolves •  Why Everything is

subject to change •  Why things gets more

complex over time

Gödel 1st Incompleteness Theorem

Any … theory (*) cannot be both consistent and!complete. For any!consistent… formal theory (*), there is an … statement that is true,!but not provable in the theory

Gödel Statement

G: True yet Un-Provable in SYSTEM H

Gödel 1st Incompleteness Theorem

Nobody CAN BE TOLD WHAT THE MATRIX IS…

SMALL BROTHER: Turing Halting Problem

Given a description of a computer program, its impossible to write a program to decide whether the program finishes running or continues to run forever

Sketch Proof

Let say Halt(software,data) exits. Returns True or False What about G(s) = If Halt(s, s) then LoopForever else Stop Think what happens if you try to compute G(G). •  If Halt(G,G) halts then it loops. •  If Halt(G,G) say it loops it will halt.

Subcase

Recursion Proof based on

Proof related to

Cantor Diagonal Proof

�Related

You Can Not Formalize The

�

You Can Not Formalize The

�•  Anything known K: always can build recursion G(K) that is “bigger”

•  A^n + b^n != c^n : halt or not? •  You never know enough (bad) •  There is always room to know/invent more (good)

2. Marketplaces

Marketplace: Set of Formal Rules

• Collect Underpants • ? [data] • Profits!

Marketplace: Sets of Formal Rules

1.  Put software in the cardboard box 2.  Bundle browser with OS 3.  Cut oxygen supply to competitors 4.  … 1923.  Profits!

Gödel Statement

G: True yet Un-Provable

New G

•  Put software in the box •  … •  Profits!

•  Create search engine •  Sell all words for bids •  Profits!

There is always another G

•  Put software in the box •  Sell words for bids •  Profits!

•  Create friends graph •  … •  Profits!

•  Put game in the box •  … •  Profits!

•  Give away free game •  Ask for money •  Profits!

Gödel Statements

•  Profitable yet un-provable by old rules •  Include G New Theory New G’s

•  Infinite number of G’s

•  No formal discovery system

Startups

•  Success: find at least one G •  Compete in old system: #epicFail • Many fails: no sure way to a new G • Quick experiments, fast pivots

The First Cycle

Attempts at G

New G

3. Scale Free Laws

Scale Free Laws

You can NOT understand the scale by looking at surroundings

•  Also known as Power Laws •  Generate long tails

Scale Free: Terrain

Scale Free: Terrain

Scale Free: Terrain

Scale Free: Terrain

ground near NASA's Phoenix Mars Lander

Startup Scale Free Variables

•  Traffic •  Users •  Revenues

Scale Free Example

50 Users

5 Users

Scale Free Example

$1,000,000,000 revenue

$100,000,000

Startup Life Cycle

CASE STUDY

•  Founded: ’07. Valuation ’11: $10,000,000,000 •  2009 revenue: $270,000,000 •  2010 revenue: $700,000,000+

Startup: first G

May ‘07

Dec ‘07

Life Cycle: Multiple Gs

07 ‘08

‘09

Scale Free: Time

Scale Free: Time

New hit (G): growth in 3 months

• 3 months: +1 month • 4 month: +2 months • 5 month: +5 months • 18 month: +4.3 years

Scale Free: Time

You are… where?

`

? ?

?

M&A Aspects

•  x100 vs x4 •  Mature: teams (cheap) or rev stream •  Startups: G search •  Big: profitable ops

Summary

• Startup jumps on G-events • Big wins: sequential G. • Can’t discover by method •  Impact & time : scale free graph • M&A: Decide between G and g+1

max@skibinksy.com facebook.com/lordmax

Must Read

•  Fooled by Randomness, Black Swan, •  On Intelligence, Incompletness •  Guns, Germs & Steel, Collapse •  The Red Queen •  Poor Charlie Almanac Ubiquity •  Evolution of Cooperation •  Nexus •  Social Atom •  The Wisdom of the Crowds

•  Tipping Point •  The Blind Watchmaker •  The God Dellusion •  Genome •  Elegant Universe •  The Trouble with Physics •  The Road to Reality •  Freakonomics

Russian Specifics

Myths

•  Russian Engineers are best in the world? – Not anymore

•  Russian entrepreneurs are most tenacious? – Good luck flogging dead horses for years

•  Russian entrepreneurs are most scrappy? –  If scrappy long enough to notice its not working –  If G exploding and you are scrappy you are an idiot

Default Rule

When in doubt, use rule #1: If its feels natural its probably

wrong

Russian “System”

• Penalize failure == 0 discovery • Hierarchical: formalized! • Process dominated: formalized! • Don’t fence inherited problems:

SOLVE THEM

Russian “System”

• Soldier vs creativity • Status vs meritocracy • Masculine vs balanced • Micromanaged vs free form • Endless list

Job #1 : G Discovery

• Everything else is secondary • First G: Life • Sequential Gs: Future • Free form, uncertain, non-process,

creative, meritocratic, human driven