Emerging Layers: Theory Behind Explosive Growth

Emerging LayersTheory behind explosive growth

Yaroslav Smirnov | @stellarnode | facebook.com/yaroslav.smirnov

Scarcity

Friction

Competes with other local musicians

Abundance

Competes with all musicians worldwide

Abstraction

Intel

ASSEMBLY LANGUAGE

§ Friction § AbundanceAbstraction

Microsoft

UNIVERSAL OPERATING

SYSTEM

§ Friction § AbundanceAbstraction

Cisco

§ Friction § AbundanceAbstraction

UNIVERSAL NETWORK

EQUIPMENT

Google

§ Friction § AbundanceAbstraction

PAGERANK

Facebook

§ Friction § AbundanceAbstraction

SOCIAL GRAPH

Key takeaway

At level i+1 of the stack, the newly valuable resource is that which emerges as scarce out of the transition from scarcity to abstraction to abundance at layer i.

Customer needs and service

Overserved customer is a dangerous one.

Overserviced

Customer ServiceJob-to-be-done

Underserviced

Lower-level needs

Higher-level needs

This is where the magic happens!

AirBnB

Overserviced Underserviced

“But I just need a place to stay”

§ Little competition from incumbents§ It is doable (no significant barriers)

Uber

Overserviced Underserviced

“I just want to get from point A to point B.”95% of the time my car sits idle.

Ask WHY you own a car in the first place

Other examples

Key takeaway

The particular combination of customers overserved at level j while being underserved at level j+1, when it happens, explains how from time to time we see markets where the demand is zero and then all of a sudden a vertical line straight up.

How it all leads to explosive growth