Principles for Innovation
Helpful principles that will make you better at innovation and increase your probability of success.
I’ve found it helpful to identify fundamental principles that help me understand the world, make better decisions in life, solve problems and be consistent in my approach to innovation and build products.
I think about most things from a physics perspective and I encourage you to do the same if you do not already do so.
These principles are learnings I've gathered from other people and my own observations. I start at the very high level so you get the fundamentals of the knowledge tree and can build up from there. It may feel a bit esoteric at the start but I encourage you to read it through.
I hope you'll find some of these helpful.
Everything is governed by systems
The world we live in is governed by systems, whether it’s natural systems that evolved before us or systems humans have built. All systems, are built on top of layers of other underlying systems.
First we have physics that is at the core. It sets hard limits to what can be achieved so if you want to innovate and solve problems it’s immensely useful to have basic understanding of physics. If you want to build a product that breaks the laws of physics your product has failed before you start building it.
Second is nature. If nature can do it, so can we. We just might not be aware of how many cycles of innovation we have to go through before we can achieve the results nature has already achieved.
Third are all the systems humans have built. The reason you can read this is because humans have invented countless systems that enable you to. Everything from language to computers.
We collect energy to fight entropy
Everything in the universe has a natural inclination to slide into a state of maximum chaos or disorder, like a room that gets messier unless you clean it up. That’s what physics calls entropy.
So from the lens of physics we are organisms that collect energy to fight entropy.
Before all our innovations the human life expectancy was around 20-30 years. Thanks to all the systems we have invented and innovated on over the centuries, we have managed to increase the life expectancy up to 85 in countries with most developed systems and as low as 60 in countries with least developed systems and there is no such things as a low-energy high income country.
The larger systems we build around us the more energy we need to collect to maintain and keep that system away from sliding towards entropy.
Optimizing time and energy to get a job done
Innovation is the process of optimizing the time and energy it takes to get a job done.
Looking at innovation thru the lens of physics helps us identify opportunities for innovation at any scale. We build products to help us get a job done. When we use those products, we offload the time and energy consumed over to that product, freeing up more time and energy for us to do other things. And that’s how products and technology become a productivity multiplier for humans.
Invention starts with a high amount of time and energy spent on the invention which then unlocks new jobs or new ways to do existing jobs. This is followed by multiple cycles of innovation where we optimize the time and energy to get that job done until we reach a point of optimal optimization.
If you can reduce the time or energy it takes to get a job done by a meaningful amount, you can unlock tremendous value.
Layers of abstractions
Everything that we have built in the past are just layers of abstractions of problems that have been solved.
Have you ever thought about all of the things that had to be invented just so you can read this while you're taking a shit?
Language, the wheel, smelting, paper, compass, printing press, plumbing, flush toilet, electricity, telephone, computer, internet, mobile phone.
And it's not even a finite list. And all of them still require energy.
Humans can only deliver 1X productivity
Humans are only capable of delivering 1X of productivity. So when it comes to our contribution to a system, we can never exceed 1X. We can however use energy and technology to increase our productivity.
Imagine that we have a job that requires 100x of productivity and that equals to 100kWh of electricity and that a human can only contribute 1kWh. Then you can either get it done with 100 humans or you can build technology that is going to get much of the job done automatically which then becomes our productivity multiplier.
Most systems that we build require some kind of human intervention. Meaning that we will always contribute some energy to the system to get the job done.
If we are asked to get the job done for someone else they would need to pay us at the very minimum 100kWh of electricity. Energy can not be destroyed, it can only be transmuted.
Human gets 1kWh
System gets 99kWh
In reality we would want to get a surplus of energy paid so that we can reduce the rate of entropy for both the human and the system and to keep innovating.
The larger the system, the less we contribute. How we distribute the surplus is up to us.
Money is Economic Energy
In the early days of human interaction, trade was straightforward: physical goods for physical goods. Two apples might fetch you an orange, or a goat could be exchanged for a set of tools. This was a direct exchange of energy embodied in the goods themselves.
But as societies grew more complex, the need for a more efficient trading system arose. Here, money entered as an abstraction of energy. Money is not just a medium of exchange; it acts as a reference to future expenditure of energy. It’s a promise that when you use this money, you will receive an equivalent amount of energy back in the form of goods or services.
This abstraction allows for a more fluid and scalable economic system, where energy can be traded in countless ways without the need for direct barter, making economic interactions more efficient and increasing the rate of innovation.
Exponential Growth and S-Curves
Understanding exponential growth and S-curves is important for innovation, yet it remains elusive to our linear-thinking minds.
This phenomenon, often misunderstood, is characterized by a rate of change that increases over time. It’s not just about getting bigger; it’s about getting bigger at an ever-accelerating pace.
Exponential growth in innovation tends to follow the S-Curve. It starts of slowly and then takes off and tapers off at the end. Once you hit the 1% of the S-Curve you are only 7-10 doublings away from reaching a 100%.
Ray Kurzweil is famous not only for his innovation but also for his future predictions by identifying exponential growth curves across industries
Moore’s Law says that the number of transistors on a microchip doubles roughly every two years, leading to exponential growth in computing power.
Social media platforms like Facebook and WhatsApp all benefit from Metcalfe’s Law. The more users they have, the more valuable they become to each individual user.
Companies that understand these dynamics can design products or services to ride the wave of exponential growth.
Recognizing and harnessing exponential growth and S-curves isn’t just about understanding a mathematical concept; it’s about understanding the rhythm of innovation, where timing, scale, and foresight are the keys to success.