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# Incompleteness for Startups

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### Incompleteness for Startups

1. 1. Incompleteness for Startups By Max Skibinsky
2. 2. Few Essays Startup-Russia.com
3. 3. 1. The Ultimate Theorem
4. 4. Gödel 1 st Incompleteness Theorem •  Ultimate Theorem •  Why everything evolves •  Why Everything is subject to change •  Why things gets more complex over time
5. 5. Gödel 1 st Incompleteness Theorem Any … theory (*) cannot be both consistent and!complete. For any!consistent… formal theory (*), there is an … statement that is true,!but not provable in the theory
6. 6. Gödel Statement G: True yet Un-Provable in SYSTEM H
7. 7. Gödel 1 st Incompleteness TheoremNobody CAN BE TOLD WHAT THE MATRIX IS…
8. 8. SMALL BROTHER: Turing Halting Problem Given a description of a computer program, its impossible to write a program to decide whether the program finishes running or continues to run forever
9. 9. Sketch ProofLet say Halt(software,data) exits. Returns True orFalseWhat about G(s) = If Halt(s, s) then LoopForeverelse StopThink what happens if you try to computeG(G).•  If Halt(G,G) halts then it loops.•  If Halt(G,G) say it loops it will halt.
10. 10. Cantor Diagonal Proof Related Proof related to SubcaseRecursion Proof based on
11. 11. You Can Not Formalize The
12. 12. You Can Not Formalize The•  Anything known K: always can build recursion G(K) that is “bigger”•  A^n + b^n != c^n : halt or not?•  You never know enough (bad)•  There is always room to know/invent more (good)
13. 13. 2. Marketplaces
14. 14. Marketplace: Set of Formal Rules• Collect Underpants• ? [data]• Profits!
15. 15. Marketplace: Sets of Formal Rules1.  Put software in the cardboard box2.  Bundle browser with OS3.  Cut oxygen supply to competitors4.  …1923.  Profits!
16. 16. Gödel StatementG: True yet Un- Provable
17. 17. New G•  Put software in the box •  Create search engine•  … •  Sell all words for bids•  Profits! •  Profits!
18. 18. There is always another G•  Put software in the box •  Create friends graph•  Sell words for bids •  …•  Profits! •  Profits!•  Put game in the box •  Give away free game•  … •  Ask for money•  Profits! •  Profits!
19. 19. Gödel Statements•  Profitable yet un-provable by old rules•  Include G New Theory New G’s•  Infinite number of G’s•  No formal discovery system
20. 20. Startups•  Success: find at least one G•  Compete in old system: #epicFail•  Many fails: no sure way to a new G•  Quick experiments, fast pivots
21. 21. The First Cycle New GAttempts at G
22. 22. 3. Scale Free Laws
23. 23. Scale Free LawsYou can NOT understand the scale by looking at surroundings •  Also known as Power Laws •  Generate long tails
24. 24. Scale Free: Terrain
25. 25. Scale Free: Terrain
26. 26. Scale Free: Terrain
27. 27. Scale Free: Terrain ground near NASAsPhoenix Mars Lander
28. 28. Startup Scale Free Variables •  Traffic •  Users •  Revenues
29. 29. Scale Free Example50 Users5 Users
30. 30. Scale Free Example\$1,000,000,000 revenue \$100,000,000
31. 31. Startup Life Cycle
32. 32. CASE STUDY•  Founded: ’07. Valuation ’11: \$10,000,000,000•  2009 revenue: \$270,000,000•  2010 revenue: \$700,000,000+
33. 33. Startup: first G Dec ‘07May ‘07
34. 34. Life Cycle: Multiple Gs ‘09 ‘0807
35. 35. Scale Free: Time
36. 36. Scale Free: Time New hit (G): growth in 3 months• 3 months: +1 month• 4 month: +2 months• 5 month: +5 months• 18 month: +4.3 years
37. 37. Scale Free: TimeYou are… `where? ?? ?
38. 38. M&A Aspects•  x100 vs x4•  Mature: teams (cheap) or rev stream•  Startups: G search•  Big: profitable ops
39. 39. Summary• Startup jumps on G-events• Big wins: sequential G.• Can’t discover by method• Impact & time : scale free graph• M&A: Decide between G and g+1