Venture Desktop’s Post

Sunday Note: Accumulated Accidents and the Reassurance Multiple

Dave Bujnowski of Baillie Gifford has become a must read for me. I loved his Q3 analysis centered around the idea of “divine discontent” and the positive feedback loop that has emerged between innovation and hyper-personalized consumer demand.

His new work on what comes after the pandemic is very interesting as well and builds on Clay Shirky’s concept of accumulated accidents, which I had never heard of before:

The idea of accumulated accidents challenges traditions and asks whether they really do represent an “ideal expression of society” (i.e. sacred institutions) or whether they are simply a series of accidents that can be unwound in the right circumstances. The unwinding part gets my attention because it often presents a significant new opportunity: Creative destruction in other words.

There are a number of interesting assertions throughout the piece, including a discussion about the self-reinforcing nature of ecosystems and culture writ large that may cause pandemic-induced behavioral change in the consumer context to be less sticky than within the enterprise.

The conclusions he comes to at the end aren’t particularly unique — infrastructure platforms (cloud giants), telemedicine, Zoom all get stronger. But his way of getting there is and mirrors something I’ve been thinking about quite a bit lately…

The Reassurance Multiple

This quote from the recent Rory Sutherland book (recommend), Alchemy, explains a lot about why certain products and behaviors gain adoption:

“Perhaps what people are seeking (when they go to the doctor) is not treatment but reassurance.”

When a company has this effect work in their favor, they have what I call a “Reassurance Multiple”.

In the enterprise context, we can think of it as “no one ever got fired for buying IBM” effect. Similarly, with Zoom reaching ubiquitous awareness, no one will fault you for scheduling a call using the software. It has become the default. Being confident that something works is secondary to knowing your reputation isn’t on the line for using it.

For consumer products, a company’s Reassurance Multiple can often be estimated by mapping its strength across these factors against competitors:

1. Community
2. Personal Transformation
3. Social Transformation
4. Purpose Finding
5. Creativity
6. Accountability

Reassurance and Responsive Instrumentation
There is another factor at play here as well which determines a company’s Reassurance Multiple — the degree to which their business is built with “responsive instrumentation”.

When behavior shifts radically, companies with “responsive instrumentation” (vertical integration, digital touch points, product focus) can adjust real-time to deliver on brand promises.

Three of my favorite examples, which I will go into in a longer piece at some point soon are Square, Lululemon, and Peloton. In each case, these companies have held up extremely well in the midst of the crisis because of their adaptability.

→ Lululemon turning stores into distribution centers
→ Peloton being capable of shifting to live streaming classes from the homes of their instructors
→ Square emerging as a dual-track engine to power the economic recovery.

Adaptability → “Reassurance” → Accumulating Advantage.


End notes:

→ The image that follows — showing Lululemon’s performance vs. peers in recent months — is a good reflection of the company’s strength.

→ I found out about Dave’s work via Paul Barnes on Twitter. I don’t now Paul personally but he is 100% worth following.

→ I’d love your feedback on these ideas (DM, Twitter, email). I use Telegram as a bit of a rough draft / scratch pad for a lot of things I want to write longer deep dive about so these thoughts are very much a work in progress.

Thanks for reading! ____ Sunday Note: Accumulated Accidents and the Reassurance Multiple

Dave Bujnowski of Baillie Gifford has become a must read for me. I loved his Q3 analysis centered around the idea of "divine discontent" and the positive feedback loop that has emerged between innovation and hyper-personalized consumer demand.

His new work on what comes after the pandemic is very interesting as well and builds on Clay Shirky's concept of accumulated accidents, which I had never heard of before:

The idea of accumulated accidents challenges traditions and asks whether they really do represent an “ideal expression of society” (i.e. sacred institutions) or whether they are simply a series of accidents that can be unwound in the right circumstances. The unwinding part gets my attention because it often presents a significant new opportunity: Creative destruction in other words.

There are a number of interesting assertions throughout the piece, including a discussion about the self-reinforcing nature of ecosystems and culture writ large that may cause pandemic-induced behavioral change in the consumer context to be less sticky than within the enterprise.

The conclusions he comes to at the end aren't particularly unique — infrastructure platforms (cloud giants), telemedicine, Zoom all get stronger. But his way of getting there is and mirrors something I've been thinking about quite a bit lately…

The Reassurance Multiple

This quote from the recent Rory Sutherland book (recommend), Alchemy, explains a lot about why certain products and behaviors gain adoption:

“Perhaps what people are seeking (when they go to the doctor) is not treatment but reassurance."

When a company has this effect work in their favor, they have what I call a "Reassurance Multiple".

In the enterprise context, we can think of it as "no one ever got fired for buying IBM" effect. Similarly, with Zoom reaching ubiquitous awareness, no one will fault you for scheduling a call using the software. It has become the default. Being confident that something works is secondary to knowing your reputation isn't on the line for using it.

For consumer products, a company's Reassurance Multiple can often be estimated by mapping its strength across these factors against competitors:

1. Community
2. Personal Transformation
3. Social Transformation
4. Purpose Finding
5. Creativity
6. Accountability

Reassurance and Responsive Instrumentation
There is another factor at play here as well which determines a company's Reassurance Multiple — the degree to which their business is built with "responsive instrumentation".

When behavior shifts radically, companies with “responsive instrumentation” (vertical integration, digital touch points, product focus) can adjust real-time to deliver on brand promises.

Three of my favorite examples, which I will go into in a longer piece at some point soon are Square, Lululemon, and Peloton. In each case, these companies have held up extremely well in the midst of the crisis because of their adaptability.

Lululemon turning stores into distribution centers
→ Peloton being capable of shifting to live streaming classes from the homes of their instructors
→ Square emerging as a dual-track engine to power the economic recovery.

Adaptability → “Reassurance” → Accumulating Advantage.


End notes:

→ The image that follows — showing Lululemon's performance vs. peers in recent months — is a good reflection of the company's strength.

→ I found out about Dave's work via Paul Barnes on Twitter. I don't now Paul personally but he is 100% worth following.

→ I'd love your feedback on these ideas (DM, Twitter, email). I use Telegram as a bit of a rough draft / scratch pad for a lot of things I want to write longer deep dive about so these thoughts are very much a work in progress.

Thanks for reading!
By: via Venture Desktop