Survival by another name
The importance of understanding ergodicity
Ergodicity is one of those concepts that you likely have never heard of, but have felt on an intuitive level.
I was introduced to it by Kent Beck , and it’s proven invaluable when it comes to thinking about startups and how to make trade-offs in that context.
Ergodicity is a way of thinking about systems. The technical definition is that a system is ergodic “if, for all its components, the lifetime outcome corresponds to the population outcome.”1
In other words, ‘ergodic’ means what is good for the many is good for you too.
What does that actually mean in practice though?
Sometimes it is easier to grasp something by considering it’s opposite. What does a non-ergodic system look like?
My favourite way to think about it is by the joke Dellana provides in the book:
“5 out of 6 people would recommend Russian Roulette”.
This is funny because we immediately understand that for the one unsatisfied customer, they are extremely unsatisfied.
In fact, they’re dead.
We intuitively understand that the downside of being the loser is far, far worse than the upside of winning.
Understanding the asymmetry has concrete implications for how we approach life.
As Dellana notes, the most successful competitive skier is not necessarily the fastest - they are the fastest skier who can complete the race without suffering serious injury. Injury in a race not only ruins our chance of winning this particular race, it can ruin our chances of winning all future races. Which is why, perhaps counterintuitively, it makes sense to not necessarily ski as fast as we possibly can to win a race.
Startups are a great example of non-ergodic systems. You may have a fantastic app, incredibly designed, which can have a real impact on people’s lives, but if you fail to figure out a viable business model before you run out of funding, it’s game over. There are no replays - unless you find alternative funds, the value of that app is now essentially 0.
Like the skier who doesn’t go as fast as they can, the goal of a startup is not necessarily to have the best tech, the best talent, or even the best marketing strategy. It is to survive to the next level - whether that’s raising funding, hitting profitability, or being acqui-hired.
This is particularly important for technical folk to understand. If if you’re optimising for global usage before you have your first paying customer, you’re playing the wrong game.
You’re investing in optionality, in 10 dollars tomorrow, that will be worthless if that tomorrow doesn’t come.
Your job, in these cases, is to deliver the dollar today that helps the business survive long enough to invest in and enjoy the fruits of the optionality of your software.