Convex Returns

Learn about changes and improvements, convex returns, and transaction cost.

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Change is guaranteed

Change is guaranteed. Survival is not. You’ve heard the Silicon Valley mantras: “Software is eating the world”. “You’re either disrupting the market or you’re going to be disrupted.” “Move fast and break things.” What do they all have in common? A total focus on change, either on the ability to withstand change or, better yet, the ability to create change.

The agile development movement embraced change in response to business conditions. These days, however, the arrow is just as likely to point in the other direction. Software change can create new products and markets. It can open up space for new alliances and new competition, creating surface area between businesses that used to be in different industries, like light bulb manufacturers running server-side software on a retailer’s cloud computing infrastructure.

Sometimes the competition isn’t another firm but yesterday’s version of the product, as in the startup realm. We launch our minimum viable product, hoping to learn fast, release fast, and find that crucial product-market fit before the cash runs out. In all these cases, we need adaptation. That is the theme we will explore in this chapter. Our path touches people, processes, tools, and designs. And as we might expect, these interrelate. We’ll need to introduce them in parallel and incrementally.

Convex returns

Not every piece of software needs to mutate daily. Some pieces of software truly have no upside potential to rapid change and adaptation.

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