Thanks to Christopher Lam, for the article.
With the year coming to a close, I have been listening to Reid Hoffman’s podcasts Masters of Scale. One of the most interesting ideas from his talks is on shaping the future — most uni students spend 3–4 years studying towards an uncertain plan for the future. Without a roadmap to get there, all the work to achieve a ‘well-rounded’ education is really well-rounded mediocrity. It is unrealistic to keep many career paths open as no-one can work in several careers all at once. One can only try as many things as fast and often as possible and then invest and commit to one option.
Competition can be a good thing and a bad thing. But you need to ask whether the very thing you are competing for is really important. We desire things that other people desire, because the basis of all human behaviour is imitation. In hyper-competitive environments, conventional competition funnels people into doing conventional things — like striving to progress in a law firm’s ranks to get a slighter higher paying job. I think the better question to ask is ‘how can we compete intensely to escape competition?’.
Anything that is valuable will have competitors: a highly desired house, a significant other, or a prestigious job. In Hoffman’s interview with Thiel; Thiel mentions that a startup needs to achieve escape velocity to dominate an industry. To reach escape velocity, Paypal needed to grow so quickly to discourage competitors from competing. “And so if you scale incredible fast — on the one hand, you have to race really hard to scale fast, but the benefit if you do it is that you’re achieving escape velocity from the black hole that is hyper-competition.”
You can start in something very competitive, but then over time, get to a place that’s less and less competitive.
In Silicon Valley, competition can be downright lethal. Think of all the late 90s search engines (eg. Ask Jeeves / HotBot / Infoseek). Google just comes along and eats their lunch.
You have to invent a new game — seek out a new, fresh Blue Ocean.
Compound interest & Paypal
There’s a quote from Einstein to the effect that ‘compound interest is the most powerful force in the universe’. Paypal grew users exponentially — at 7% per day, even if you start with 24, from 24 to 1000 by mid November; 13,000 by December 1999. By early February of 2000, Paypal was up to 100,000. By April 2000, they were up to a million.
Note: compound interest formula is [(1+% rate of growth of time period)^no. of time periods]. You can also divide 72 by the % p.a rate of growth to find out when returns double
Meet the Author
I'm William Chow, 24 year old kid from Sydney, Australia. One of my many passion is all things tech, startups & entrepreneurship. I work in a marketing tech startup and always keen to learn more. I'm also currently doing a grade cert in computing at UNSW. I regularly attend tech meetups & read a lot of books on startups. This blog will not only talk about startups, but also the latest tech gadgets, trendy tech news and basically anything related to tech!
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