When business is harder than technology.

Mistaking an adversarial environment for a benign one.

Here’s a small excerpt from an episode of The Tim Ferriss podcast.

Tim Ferriss: …what was the subject matter and the intent behind the MOOC that you taught?

Balaji Srinivasan: Great question. So the subject matter, the title was Startup Engineering. And the concept was that it was basically the class that I wish I had had before doing my first startup. And so it was kind of like a time capsule back to somebody who was into math or into just technology in general, but was just completely naive about how to actually run a business or anything like that. When doing my first startup actually, this is a first approximation, but I thought that the primary difficulty would be calculating difficult integrals. And I was like, “Okay. That’s the hard part, and everything else is kind of basic, whatever. We can knock that out before breakfast.” And of course that’s not the case.

Tim Ferriss: As often turns out!

Balaji is a guy with two advanced degrees and PhD in engineering from Stanford, who wrote the scientific software for what became one of the largest clinical genome centres in the world, and was CTO of Coinbase; he’s no technical slouch. There’s a lot that goes into a growing profitable company and the technological challenges are rarely the hardest ones.

The environment of pure engineering is one where you are left on our own to create a design. There are constraints and boundaries set, but otherwise the problem is known and stays relatively fixed. If there are dynamics involved then they can be discovered and designed for. Within a few months the solution is better than anything anyone else has come up with! And so the solution is released from the lab to the real world.

But the real world is out to get you. You can be both first and better, and you may still only get to be Betamax. Or you can disrupt an industry and still get to be Zillow:

I love this framing. I would propose that “random” is a subset of “benign”, but the mindset that the real world is “adversarial” is a useful one. A healthy dose of paranoia is a key ingredient for business success.

The challenges of business are dynamic and not subject to the hard rules of physics. They are inherently multi-agent systems where complexity continually emerges. Approach it accordingly and you may even come to enjoy the harder challenge.