Singularity: rise of the ignorant e-commerce geniuses and their lean machines

I think we know a few things about the future shape of startups by now.  They will:

  • Remain focused on core expertise and outsource everything else;
  • Ignore customer focus groups and rely on tight expertise groups at their core to design differentiated products
  • Launch fast and iterate at speed
  • Be run according to facts and not opinions
  • Test and iterate continuously
  • Make decisions quickly and constantly
  • Keep capital intensity low

Beyond that, here is a fascinating phenomenon that I have seen happen recently and that seems to be getting prevalent:  Ignorant founders do it better.

Yes I am toying with you, dear Reader, but bear with me. 

I have been talking to a number of e-commerce startups recently who share a few things in common. 

  • They do not anticipate any knowledge of their end market
  • They do not pretend to understand what their customers want
  • … nor where they can be found online

They understand the basics of product and pricing and how to manage their supplier relationships; they are competent but not stellar on back-end and customer service.

Where they shine is precisely where you would expect them to be weak: they are entirely ignorant of, and refuse to assume any knowledge of, what method will work in terms of attracting customers.  They will continuously spend small amounts of money across channels and simply measure, measure, measure (or correlate, correlate, correlate).  They throw data at the problem. 

In truth, this is nothing new.  It is very similar to how some areas of science are evolving. Algorithms and heuristics are supplanted by simpe data crunching but on a massive scale; throw enough data and computational power at a problem and let the machine tell you what works.  See Wired:

In just over a day, a powerful computer program accomplished a feat that took physicists centuries to complete: extrapolating the laws of motion from a pendulum’s swings.  Developed by Cornell researchers, the program deduced the natural laws without a shred of knowledge about physics or geometry.

The Singularity is Near and coming to a website near you.

dynamic visions

PS: this post was partly inspired by some great blogs I stumbled across recently thanks to nivi;

And just post writing, stumbled across this one from Eric Ries:

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