A few years ago I was on the phone catching up with my old boss from the venture days. Whenever we chat I ask about whatever’s “new.”
During our call, Bitcoin came up briefly. He said he didn’t have much of an opinion, except that it was unlikely to ever replace the dollar.
When I asked why, he muttered, “Lindy Effect,” and moved on to his next thought. Luckily, I’m used to this - whenever I chat with him I have a browser window open and my fingers ready to Google the 500 things he assumes everyone knows but only he does.
After Googling, I found out that the Lindy Effect is beautifully simple - longevity is our best predictor of the future.
It’s not perfect, but it’s a useful tool. If something has remained relevant for 50 years, it’ll likely be relevant for another 50. Even if it seems ripe for disruption, five decades of relevance usually means deep, intricate roots. My boss’s point was that gold has been considered valuable for thousands of years, and it’s unlikely it’ll be unseated quickly.
Another example - To Kill a Mockingbird. Teachers have been assigning it to high school kids for decades. There might be better books to get across the message TKAM does, but those books would have to fight against the 50 years of roots TKAM has put down. A new book would require teachers to change lesson plans and curriculums, school libraries would have to buy/license new books, etc. It’s more likely than not that my kids and your kids will read TKAM in high school because, among other reasons, our parents did. And, if it’s been around that long, it’s probably doing it’s job.
So, what’s this got to do with your startup life?
Two big things: Problem/Solution Selection and Strategy.
When you’re picking a problem to work on, make sure it’ll still be painful and urgent and expensive and growing and… most of all… relevant in 5, 10, 15 years. And the best way to know that it’ll be relevant is to make sure it’s been relevant.
Fifteen years ago people and businesses struggled to track their expenses. Fifteen years from now people and businesses will still struggle to track their expenses. The problem is safe, now you’ve just got to niche down and find useful solutions.