Inflection Theory + Breaking Patterns
Part 1 of 3
Highlights
- What is Inflection Theory?
- How to be Pattern Breaking
- Creating a New Game
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Recently, multi-exit founders and fellow VCs Reid Hoffman and Mike Maples Jr. met to discuss Mike’s new book Pattern Breakers, as well as things they’ve learned from their experiences as founders and venture capitalists over the last few decades. It’s a great interview, and the book is good as well.
So many of the insights and the perspectives they discuss, and that Mike asserts in his book, are valuable beyond just the pursuit of pattern-breaking 100x start-ups.
Let’s dig into it:
Inflection Theory
Pattern Breakers is based on what Mike Maples, Jr. and co-author Peter Ziebelman call “Inflection Theory.” Inflection theory is “a conceptual explanation for why some ideas possess greater breakthrough potential than others,” they write in Pattern Breakers.
It’s the theory that the foundation of good and successful ideas are in inflections. From inflections, you identify insights. You then use the insights to generate ideas:
This is in contrast to starting from an idea, looking for a target market, iterating, and evolving until (hopefully) you find your niche.
According to inflection theory, if your inflection is right and you have a good insight, your idea doesn’t have to be right the first time. You’ll be able to iterate to it.
Some examples:
- X/Twitter, which was once a podcasting company called Odeo
- Twitch, which was once justin.tv and focused on live streaming a man named Justin’s life 24/7
- Lyft, which was originally Zimride for facilitating carpooling at colleges and companies
These look like old examples of successful pivots. What’s interesting is that Mike’s research has shown is why these were successful when others weren’t.
His data indicates that the difference between startups that had successful pivots and others that failed was that the successful startups had created their ideas after identifying an inflection and an insight based on the inflection.
In the example of Lyft, their:
- Inflection- smartphones with built-in GPS
- Insight- riders will trust that they can get a ride with a stranger just as they trust getting into a taxi
- Original Idea- Zimride for facilitating carpooling at colleges and companies.
- Final (Current) Idea- Lyft for ridesharing
Beginning with an inflection and insight creates a solid foundation for change without feeling like you’re floundering or rudderless. Even if the original idea misses the mark, if the inflection is still true, as well as the insights of how to harness it, a pivot is then simply changing the way to take advantage of these things.
Creating a New Game
You cannot be pattern-breaking (or even win in general) in a crowded existing system. The existing system is full of incumbents and is playing a game in which the rules are favorable to them. The only way to break through is to change the system, or ‘change the game.’
Mike and Peter share a simple example: if you imagine that an incumbent sells apples, you don’t want to make a better apple. Instead, you want to create something new — ‘the world’s first and only banana!’ Not everyone will want a banana, but of the people who do, all of them will only be able to buy them from you.
We’ve seen this work successfully before:
- When Apple introduced the iPhone, people didn’t ask how it compared to the Blackberry or evaluate it feature by feature. Instead, it completely changed the smartphone game.
- When Tesla introduced the Model S (in 2012), people didn’t ask how it compared to a Mercedes or a BMW; instead, it was the only electric sedan available, and people who were interested in electric vehicles became fanatics.
When you build from inflections and not just ideas, you are able to create things that never existed before — to add to the list of things that humans can do, such as live stream, listen to a podcast, tweet, websurf, or rideshare. None of these things were possible before Twitch, Apple, Twitter, Mosaic, Uber, and Lyft. They create a new game, and force the incumbents to play by a new set of rules.
Another way to say this is that you want to force a choice, not a comparison. Despite what you might have been taught, to be pattern-breaking, you don’t want to be the “Netflix of…” or the “Salesforce of…”, you want to create something totally new, that only you can see through what you’ve uncovered in an inflection and the insights around how to take advantage of it.
What happens when you don’t build from an inflection? Or don’t create a new game? What if you don’t want to be pattern-breaking?
We’ll dive into that and more in Part 2 of 3 next week.
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Mike Maples Jr. is a multi-exit founder and partner at the VC fund Floodgate. Reid Hoffman is the Founder of LinkedIn a VC at Greylock and co-founder of Inflection AI.
References:
This post is sponsored by Witz Creative
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