Pablo Picasso was a great artist. You might not know it, looking at a contorted portrait, features distorted, unrecognizable as a face. But Picasso knew what all great artists know: Once you’ve mastered something, it’s how you break the rules that make you truly unique.
There’s a name for things that consume your life and fill your thoughts, but have no business model: hobbies. In other words, business models matter. There’s plenty of thinking about how businesses should grow and run, from venerated giants like Michael Porter and Clay Christensen. But the reality is, most traditional business thinking has one fundamental flaw. It assumes tomorrow is like yesterday, only more so.
Tomorrow, as the pace of change in the modern world definitively proves, is anything but like yesterday. Less than a decade ago, smartphones were science fiction; today, they’re so commonplace we’ve forgotten how to live untethered from the grid. In the past fifty years, the lifespan of a company on the Fortune 500 has tumbled from 75 years in 1950 to just 15 years in 2010.
Models are foundations on which business is built: financial models, marketing models, data models, go-to-market models. Models let us scale, guiding everyday behavior, leaning on the hard-won lessons of the past. That means smart entrepreneurs need to know the models and understand the fundamentals.
YCombinator’s Paul Graham once said, “if you can just avoid dying, you get rich,” by which he meant that the vast majority of new companies take themselves out through their own mistakes. But to find greatness, it’s not enough to just avoid failure.
If you’re trying to disrupt an industry, then by definition, you have to break at least one model wide open. Just like Picasso, mastering the art form makes you competent—but defying it makes you awesome.
There’s good reasoning behind this. Peter Thiel says a monopoly is the fundamental condition of every successful business. “In the real world outside economic theory,” he says, “every business is successful exactly to the extent that it does something others cannot.” Traditional competition—the kind economists like to praise as the lofty idea of the free market—won’t get you very far. Airlines are in perfect competiton; Google has a virtual monopoly. And Google makes more money than all the airlines combined.
Startups need to master business, funding, and growth models—and then figure out how to rethink them. That’s why the theme for Startupfest 2015 is Models and Masters. We’re going to unbox some of the world’s greatest business models, looking deep within them to understand how they upended entire industries. And we’ll hear from those who’ve mastered entrepreneurship enough to know when to follow the rules—and when to change the game entirely.
