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Finding the signal with all of the noise!

October 2, 2008

I have had a hard time sitting down to write blog posts over the past couple of weeks.  This morning I began realizing that it might be because my ‘opportunity’ radar has been on ‘high alert’.  Why?  There has been so much chaos in the world: Iraq, Afganistan, McCain/Obama, Palin/Biden, bank failures, insurance company failures, bailout bills, forclosures, credit tightening, dollar devaluation, patent litigation and so on.

Whenever there is turmoil and chaos, there is opportunity.  Fortunes are made and lost in times of war, expansion, contraction and confusion.  Several weeks (yes weeks) ago I co-founded a new startup in the mobile space.  Realizing that a) the concept and execution was great and b) the world was in such turmoil I figured the market would likely overlook the opportunity I decided to jump.  During this VERY short period of time our application won Google’s Android Developers Challenge and we were able to enter into an agreement with T-Mobile to launch our application in conjunction with the launch of their G1 mobile phone.  During any normal day this wouldn’t be possible.  Chaos = Opportunity.

As I suggested back in April, “If you can ‘bootstrap’ your startup over the next 12-24 months you are going to be in the catbird seat when your local venture capitalist peaks his head out of the cellar.  My thesis is that it is times like these that create the best startups.  There won’t be funny money awash in the market making it almost impossible to figure out which startups are built to last and which are built to fail.  Entrepreneurs should be excited to realize they will have fewer competitors and they won’t have to waste their time ‘waiting’ to raise venture capital.  Instead they can just get to work - start building.  Chaos is an entrepreneur’s best friend - embrace it!”

Let me tell you a secret.  Over the years I have met lots of people who were faster, smarter or more dedicated than I am (lets call them A players).  Being a competitive person (but rarely the smartest) I always looked for the advantage.  At some point I realized that most of these ‘A players’ couldn’t deal with chaos, conflict or adversity.  Adding a little chaos to a competitive situation could quickly turn an A player in a weak B or C player.

I starting adding conflict into high school debate. In policy debate (CCX) one team must affirm a specific resolution and the other must negate it.  Most teams have one set of files for the affirmative and another for the negative.  I would try to flip the issue, agree with their position, but argue with the impact of the resolution (i.e. their policy does in fact do what they claim, but is that a good thing?).  The evidence in their files was designed to support their position not the impact of the underlying resolution.  Most teams had the necessary evidence in their second set of files, but the resulting chaos (i.e. having to change their entire case on the fly) help me win most debates.  Of course I didn’t realize what I was doing until I became a Marine.

The Marine Corp institutionalized the idea of chaos for me.  We studied hundreds of battles and learned how everyone from the Spartans to the Mongolians used chaos to win wars.  We incorporated chaos into our battlefield strategy, drilling over and over until chaos became normal.  Chaos is the reason the Marines NEVER lose battles (wars are won or lost by politicians).

The opportunity to prosper from chaos in business became clear to me immediately.  Matt Trossen, the CEO of Trossen Robotics, wrote an article titled “Dead Man Dancing” where he said, “you aren’t a real entrepreneur if you haven’t run out of money a few times.”  Matt’s investor actually said that to him, but I think it points out a great way to incorporate chaos into a business situation.  Let me explain.  Give two people $20MM to start a business, one is a an A player and the other me.  In most cases the A player wins.  Add a little chaos; say don’t give either person any money, and in most cases I would bet on me.  Running out of money is a great way to see how well you perform under pressure.  If you can learn to operate in chaos you can beat almost any opponent (unless they are masters of chaos too).  Want to learn more about chaos theory:

Written by Alexander Muse · Filed Under Blog, Startups 

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