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During the last couple of days one theme has been coming up so often, that it can’t be a coincidence: a successful business is nothing more and nothing less than one possible solution to a complex maths problem. Random data points are no mathematical proof, but here you go with two exhibits – not counting the recent conversation with Silicon Valley veteran Mark Zawacki – to illustrate the point.

Exhibit Nr. 1: “Combinatorial Innovation”

The Economist runs the story “A Cambrian Moment” this week as an intro to its issue about tech startups. Hal Varian, Google’s Chief Economist, is quoted of calling startups and presumably their tech and business model innovation as “combinatorial innovation”.

Now is this just throwing overcooked spaghetti at a wall and seeing what sticks? It sometimes looks like that. However one might argue that the really successful startups are going at it in a much more deliberate, calculated and mathematical way. They hire the best computer science and maths wizards or are being run by one. They set their eyes on a problem and iterate their product until they get it right – almost like a Monte Carlo simulation searching for some equilibrium state of a wildly complex problem. And: they collect data until a pattern emerges that delivers value.

Exhibit Nr. 2: “A Business Model is a Profit Algorithm”

Another analogy to maths comes from Horace Dediu, the analyst and blogger famous for the blog. He claims “a business model is a profit algorithm”. Again, here business is just another mathematical problem. And the analogy is striking indeed. The best algorithms are governed by simple rules, are adaptable and converge to the right solution quickly while at the same time using their resources efficiently. A business with these qualities must definitely be profitable!

So then, looks like I should just go back to my maths and physics textbooks in the basement!

Facebook HQ - Bike repair shop in the biggest kindergarden in the world

Facebook HQ – Bike repair shop in the biggest kindergarden in the world

In my recent visit to the Silicon Valley we visited some of the best known internet brands. Before heading over to the West Coast, I was obviously excited about visiting the Twitters and Facebooks of this world. In hindsight those were not the most insightful visits: Youtube was a software engineering ghost town with everybody silently hacking on, Facebook resembled an oversized kindergarden with 24/7 services and supervision and Twitter shared little news beyond what one can learn when reading up on them.

Talking to founders and understanding their way of thinking and vision is the only way to observe what happens at the cutting edge of innovation

Contrast this with one of the highlights: visiting Burt Herman and his team have realized the disruption social media brings to journalism. They went out and built a tool that leverages social media as an additional source. Additionally they want the journalists to do what they’ve always done and what seems more and more important: curating. How should mere mortals stay on top of the news and non-news that we are exposed to? How should we be able to prioritize what is happening in all the channels available today? Storify has a bold vision: change how stories are being told.

Talking with Burt Herman – one of the co-founders of storify – you could feel the many hours he and his team have been thinking about every feature of the tool and how to make it as simple as possible to use. You could feel how well they understand the disruption social media is to today’s journalism and you could feel the passion they have for journalism and new ways of story-telling.


Burt Herman, co-founder of

Not surprisingly the backend software engineer happy with solving really hard coding problems in the core of Facebook’s code or the marketer trying to bring the magic of Twitter to ever more countries around the world have less to tell. Talking to founders and understanding their way of thinking and vision is the only way to observe what happens at the cutting edge of innovation.