Industrial Entropy and the Future of Work -- Chris DeVore, Founders Co-op

The technology industry has changed sides. After decades as an ally of the multinational corporation -- enabling scale and conferring competitive advantage -- the accelerating pace of technology change has reached a point where most large organizations can no longer keep up. -- Chris Devore

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  1. Rule #1: Capital seeks dominance

    The first and most germane to today’s discussion is that the capital markets are dominance-seeking; capital wants to create + capture surplus; monopoly rents are best if you can get them (and keep them), but market leadership to the point of dominance is a nice second-best. Mike Maples calls these kinds of companies “thunder lizards”, and they’re the ones that drive the majority of venture returns.
  2. How did this happen? Meet Ronald Coase.
  3. Rule #2: Achieving dominance is slow + “planful”

    The next big lesson, which is really a corollary to the first, is that venture is a slow business, not because VC’s all take August off to sit on their yachts, but because prosecuting dominance is not a short-duration activity.

    True dominance in today’s global, tech-enabled economy is achieved only through incredible levels of sustained excellence, and requires successful firms and their leadership teams to pass through a series very difficult organizational and capital markets state-changes. Starting a software company is checkers; building one to dominance is three-dimensional chess, with a good measure of luck and timing thrown in.
  4. Rule #3: Dominance has become fragile

    The third lesson, which may seem like a contradiction of the previous one but really confirms the degree of difficulty associated with achieving dominance, is that Moore’s Law has made dominance more fleeting than ever. The pace of technology innovation – of the kind that has the power to threaten the existence of entire industries – has accelerated to the point that most organizations operating at any meaningful scale simply can’t change fast enough to keep up.
  5. Conclusion: Dominance has become a capability, not a state of being

    The implication of this change is that the nature of competitive advantage – which for decades has been built around relatively stable things like brand, capital strength and established distribution networks – has begun an accelerating shift toward a much more fragile and hard-to-scale capacity with a one-word description: “agility”.

    Agility isn’t a thing, it’s just a label for a tightly interwoven set of human capital, business process and leadership assets that, in combination, allow the best large organizations to use the pace of technological and cultural change as a weapon against their competitors.