Reality is complex, so in order to comprehend it, we use abstractions. We cannot hold the whole terrain in our mind – every single tree or blade of grass. Instead, we create and use maps to represent it in a resolution that’s manageable for our cognitive capacity.
In this example, the map is a mental model of reality. We use different mental models to represent different aspects of reality, and each field of knowledge has its own commonly used abstractions.
For example, in the field of startups, those are the minimum viable product, minimum viable segment, validation, traction, etc.
Knowing these concepts is crucial because it lets you comprehend, analyze, and predict reality in the field of startups.
Most mental models, however, are multi-purpose tools, and it could give you a competitive advantage to increase the size of your mental toolbox by incorporating mental models from different fields of knowledge.
Below you’ll read about a few concepts from the fields of chemistry and physics that can help you expand your thinking in the realm of startups.
“Give me a lever long enough and I shall move the world.”
As Archimedes understood, by using a lever and a fulcrum you can generate a large amount of output force with a small amount of input force.
This should tip you off that forces in the world of startups don’t behave linearly. By using the right kind of leverage your efforts (input force) could lead to disproportionate returns in your favor (output force).
In business, leverage is commonly used in the sense of financial leverage: using debt to increase the returns on your capital.
Debt, however, is only one kind of lever. Technology itself can be a great lever for amplifying the effects of your efforts. For example, the ability to distribute content on the internet for extremely low costs amplifies the effect of the effort I exercised to write this article.
Due to Newton’s first law of motion, any object in motion wants to preserve its direction and speed of motion unless an outside force acts on it. And the tendency of an object to resist change depends on its mass. In other words, the more massive the object, the bigger force you need to apply to it to change its direction of movement.
This model is very useful to understand why massive, complicated structures (big companies, countries) are extremely resistant to change up to the degree that it becomes practically impossible for individual actors to influence their trajectory. Even the CEO might be unable to make big changes because they are captive to the interests of all the different stakeholders of the business.
This is a big reason why small startups are much better suited to innovate, experiment, and constantly pivot (i.e. change direction) to satisfy new market niches. Flexibility, in that case, is a big advantage.
When left alone, things slowly move from a state of order into a state of disorder. In a way, work itself is at a base level a constant fight against entropy. In order to escape its effects and to move in a productive direction, a certain amount of constant energy (effort) is required.
Once you leave a project to work on another one, entropy sets in and starts working against your progress. Since your input energy and time are limited, you need to use them wisely. Consequently, spreading yourself too thin is not a good idea. It’s better to concentrate your efforts into a few (highly leveraged) areas to minimize the time during which entropy undermines your progress.
4. Activation Energy
The reason why the coal mines of the world don’t spontaneously combust into flames is that combustion requires a certain amount of activation energy (in this example – heat).
This is also true of markets. For example, blockchain and Bitcoin were solutions in search for a problem for years. The economic uncertainty and accumulating inflationary fears related to the dollar, however, were arguably the activation energy needed to propel the price of Bitcoin upward in 2020 and 2021.
Understanding the role of the catalyst and activation energy in the market is often the key to finding the right startup market timing. In the realm of tech startups, this is often the mainstreaming of new technology.
A great way to start thinking differently about startups is to understand concepts from other fields and use them as mental models that help you see the startup world dynamics in a new light.