Incompleteness  for Startups  By Max Skibinsky
Few Essays Startup-Russia.com
1. The Ultimate    Theorem
Gödel   1 st   Incompleteness Theorem                       •  Ultimate Theorem                       •  Why everything ev...
Gödel   1 st   Incompleteness Theorem                        Any … theory (*) cannot                        be both consis...
Gödel Statement   G: True yet Un-Provable in SYSTEM H
Gödel   1 st   Incompleteness TheoremNobody CAN BE TOLD WHAT THE MATRIX IS…
SMALL BROTHER: Turing Halting Problem                   Given a description of a                   computer program, its  ...
Sketch ProofLet say Halt(software,data) exits. Returns True orFalseWhat about G(s) = If Halt(s, s) then LoopForeverelse St...
Cantor                                                  Diagonal Proof                                          Related   ...
You Can Not Formalize The
You Can Not Formalize The•  Anything known K: always can build recursion G(K)   that is “bigger”•  A^n + b^n != c^n : halt...
2. Marketplaces
Marketplace: Set of Formal Rules• Collect Underpants• ? [data]• Profits!
Marketplace:          Sets of Formal Rules1.  Put software in the cardboard box2.  Bundle browser with OS3.  Cut oxygen su...
Gödel StatementG: True yet Un-   Provable
New G•  Put software in the box   •  Create search engine•  …                         •  Sell all words for bids•  Profits...
There is always another G•  Put software in the box   •  Create friends graph•  Sell words for bids       •  …•  Profits! ...
Gödel Statements•  Profitable yet un-provable by old rules•  Include G New Theory New G’s•  Infinite number of G’s•  No fo...
Startups•  Success: find at least one G•  Compete in old system: #epicFail•  Many fails: no sure way to a new G•  Quick ex...
The First Cycle                   New GAttempts at G
3. Scale Free     Laws
Scale Free LawsYou can NOT understand the scale by      looking at surroundings        •  Also known as Power Laws        ...
Scale Free: Terrain
Scale Free: Terrain
Scale Free: Terrain
Scale Free: Terrain ground near NASAsPhoenix Mars Lander
Startup Scale Free Variables      •  Traffic      •  Users      •  Revenues
Scale Free Example50 Users5 Users
Scale Free Example$1,000,000,000 revenue $100,000,000
Startup Life Cycle
CASE STUDY•  Founded: ’07. Valuation ’11: $10,000,000,000•  2009 revenue: $270,000,000•  2010 revenue: $700,000,000+
Startup: first G                      Dec ‘07May ‘07
Life Cycle: Multiple Gs                ‘09       ‘0807
Scale Free: Time
Scale Free: Time      New hit (G): growth in 3 months• 3 months: +1 month• 4 month: +2 months• 5 month: +5 months• 18 mont...
Scale Free: TimeYou are…       `where?              ??      ?
M&A Aspects•  x100 vs x4•  Mature: teams (cheap) or rev stream•  Startups: G search•  Big: profitable ops
Summary• Startup jumps on G-events• Big wins: sequential G.• Can’t discover by method• Impact & time : scale free graph• M...
max@skibinksy.comfacebook.com/lordmax
Must Read•    Fooled by Randomness, Black Swan,   •    Tipping Point•    On Intelligence, Incompletness      •    The Blin...
RussianSpecifics
Myths•  Russian Engineers are best in the world?   –  Not anymore•  Russian entrepreneurs are most tenacious?   –  Good lu...
Default Rule   When in doubt, use rule #1:If its feels natural its probably              wrong
Russian “System”• Penalize failure == 0 discovery• Hierarchical: formalized!• Process dominated: formalized!• Don’t fence ...
Russian “System”• Soldier vs creativity• Status vs meritocracy• Masculine vs balanced• Micromanaged vs free form• Endless ...
Job #1 : G Discovery• Everything else is secondary• First G: Life• Sequential Gs: Future• Free form, uncertain, non-proces...
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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
  40. 40. max@skibinksy.comfacebook.com/lordmax
  41. 41. Must Read•  Fooled by Randomness, Black Swan, •  Tipping Point•  On Intelligence, Incompletness •  The Blind Watchmaker•  Guns, Germs & Steel, Collapse •  The God Dellusion•  The Red Queen •  Genome•  Poor Charlie Almanac Ubiquity •  Elegant Universe•  Evolution of Cooperation •  The Trouble with Physics•  Nexus •  The Road to Reality•  Social Atom •  Freakonomics•  The Wisdom of the Crowds
  42. 42. RussianSpecifics
  43. 43. Myths•  Russian Engineers are best in the world? –  Not anymore•  Russian entrepreneurs are most tenacious? –  Good luck flogging dead horses for years•  Russian entrepreneurs are most scrappy? –  If scrappy long enough to notice its not working –  If G exploding and you are scrappy you are an idiot
  44. 44. Default Rule When in doubt, use rule #1:If its feels natural its probably wrong
  45. 45. Russian “System”• Penalize failure == 0 discovery• Hierarchical: formalized!• Process dominated: formalized!• Don’t fence inherited problems: SOLVE THEM
  46. 46. Russian “System”• Soldier vs creativity• Status vs meritocracy• Masculine vs balanced• Micromanaged vs free form• Endless list
  47. 47. Job #1 : G Discovery• Everything else is secondary• First G: Life• Sequential Gs: Future• Free form, uncertain, non-process, creative, meritocratic, human driven

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