"Pattern Breakers
By Mike Maples Jr. and Peter Ziebelman
PublicAffairs, 288 pages, $30
For every promising startup, countless others quietly shutter or chug along without any real chance of success. The odds are tough even for great ideas, while overconfidence and confirmation bias can lead founders to hang on to unpromising ones. But there are steps that aspiring entrepreneurs can take to better envision, assess, operationalize and refine business ideas.
In "Pattern Breakers," Mike Maples Jr. and Peter Ziebelman offer their perspectives on why some startups succeed while others fail, and propose a road map for improving the odds of entrepreneurial success. As venture capitalists themselves (Mr. Ziebelman also teaches a course on entrepreneurship and venture capital at Stanford's Graduate School of Business), the authors draw heavily on their experiences with the founders of several startups, including the streaming platform Twitch, the ride-hailing service Lyft and the online education company Chegg.
The premise of "Pattern Breakers" is that "inflections -- such as a change in the power of a technology, a change in people's attitudes, a change in regulations -- are the underlying force that start-ups can exploit to radically alter how people think, feel, and act and thus create a radically different future." The internet, smartphones and -- most recently -- rapid advances in large language models are examples of technological inflection points. The 2008-09 financial crisis and the imposition of Covid-related regulations were moments of societal and political inflections. Transformational startups, the authors observe, often "harness one or more inflections to change human capacities or behaviors in a radical way."
To assess whether an idea is leveraging an inflection, Messrs. Maples and Ziebelman suggest an "inflections stress test" to figure out what is "the new thing," "why it's powerful" and what are the "conditions for success." For instance, the iPhone 4s with GPS was an inflection that "enabled smartphones to be reliably located within one-meter accuracy" and -- assuming enough people had smartphones with GPS chips and were "willing to share their location information with applications" -- would facilitate the growth of ride-hailing services such as Uber and Lyft.
To keep abreast of potential inflection points, the authors suggest "living in the future," whether by tinkering "with the new powers that emerging technologies confer," by taking jobs that offer "an invaluable learning experience" or an "unparalleled vantage point into" a new technology, or by keeping "a pulse on emerging trends." According to "Pattern Breakers," a startup based on ideas that are both "non-consensus and right is the path with the highest odds of achieving a breakthrough," and "lets the start-up compete based on being different, rather than being better."
For potential founders who decide to take the plunge with their own company, Messrs. Maples and Ziebelman offer a number of tactical suggestions. On building a team, they urge founders to take "inspiration from the film 'Ocean's Eleven.'" At Twitch, "each member brought distinct yet complementary skills to the table, and there were minimal conflicts over roles or task ownership." The authors place particular premiums on "undiscovered talent" and on finding a "superbuilder" who can get things done.
On the topic of measuring success, "Pattern Breakers" suggests that founders "avoid competing with incumbents" and instead focus on "introducing entirely new rules" by finding "a group of people with a shared belief in moving together toward a different future." At times, the authors argue, this involves "uniting a passionate minority against the prevailing norms of the majority." They recall how Lyft "pushed a gray area of the law" by operating without regulatory approval in some regions, despite -- for a period -- receiving "cease-and-desist letters every day" from government agencies.
"Pattern Breakers" brings to mind the achievements of modern technology, from vaccines and antibiotics to streaming music and digital navigation systems with real-time traffic updates -- all innovations that broke from conventional wisdom. Innovations on the horizon might include an improved treatment for Alzheimer's and the production of sustainable energy. At the same time, there remains the potential for insidious disconnections between profitable growth and societal well-being, as we've seen with the opioid epidemic and the negative effects of social media on mental health.
The harmful consequences that emerge from innovative ideas don't have to be the result of malicious intent. The urge to succeed often drives companies to push forward without anticipating or addressing the harms they might create along the way. These blind spots are most prevalent when companies are narrowly focused on the benefits, without thinking through the costs. I once co-wrote a paper documenting racial discrimination at Airbnb, for instance; Brian Chesky, one of the company's co-founders, later commented on the slow response to the problem: "There were lots of things we didn't think about when we, as three white guys, designed the platform."
It is easy to see how such blind spots can emerge. Estimates vary, but some recent reports suggest that barely 0.5% of venture-capital dollars go to black founders, 13% go to teams with at least one woman and nearly 75% of U.S. venture-capital firms have no women at the partner level.
Entrepreneurship and innovation play a critical role in shaping a better future, and Messrs. Maples and Ziebelman provide helpful guidance. But to truly benefit from innovations, founders, citizens and policymakers all need to think about the inflection points on the horizon and how to create broad societal benefits while seeking to understand and minimize societal harms.
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Mr. Luca is a professor of business administration and the director of the Technology and Society Initiative at Johns Hopkins University Carey Business School." [1]
1. Be Different, Not Better. Luca, Michael. Wall Street Journal, Eastern edition; New York, N.Y.. 19 July 2024: A.13.
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