Revisiting the definition of rights

I believe my derivation of Rights from first principles provides the most consistent definition. Let’s see how it holds up in various circumstances, where other formulations fail.

My position on abortion recognizes viability as the existence of an independent person. This is the beginning of a human life’s ability to exist with a mutual recognition of rights.

In the context of criminal justice, a violation of the someone else’s rights demonstrates a non-recognition of rights. As a consequence, the violator’s rights may then lose recognition. Under imminent threat of violence, a person may defend themselves or others against the violator. The violator forfeits the right to life through non-recognition. Following the crime, justice may demand incarceration or punishments, as the violator’s rights are diminished. The death penalty is the ultimate retaliatory non-recognition of the violator’s right to life.

The consistency of this definition of rights across abortion, self-defense, criminal justice, and the death penalty strengthens the case for it being correct.

The Proper Role of Violence in a Civilized Society

We need conversations about the proper role of violence in civilized society. Intellectual discussion about violence is not incitement.

We are repeatedly reminded that violence is never the answer. It’s the proper message to convey to children at the playground. The principle continues to apply generally to most situations ordinarily. However, with adulthood comes the responsibility to understand the world more deeply. This includes the understanding that the world is not a safe place. Even if one never commits an act of violence, there are those who would initiate force in contravention of norms. Maturity requires nuance.

All rights are derived from the right to life as a human being. That necessarily includes the right to protect that life through self-defense and defense of others. We immediately see a legitimate use of violence for defense.

Mutual defense extends collectively to territories organized into defense pacts. This may be at the level of nation states or military alliances like NATO. Military action to repel foreign invasion is another legitimate use of violence.

In libertarianism, the Non-Aggression Principle (NAP) has primacy. The NAP prohibits the initiation of force.

The philosophy of Objectivism holds that the initiation of force is an evil violation of individual rights against which the government should protect its citizens.

http://wiki.objectivismonline.net/Initiation_of_force

Protection from the initiation of force entails the use of retaliatory force in self-defense and the defense of others. Minarchists believe this to be the government’s only legitimate role—to protect individual rights through the monopoly on retaliatory force wielded through the due process of law.

Guy’s Take #61 – Blockchains, A Square Peg for Round Holes provides this revelatory nugget on the topic of government protecting property rights. A system of state violence is what secures physical things. Digital information, such as NFTs, can never secure anything, because physical security ultimately relies on violence.

Having entrusted government with a monopoly on violence, Robert Malone asks the right question.

Ryan McMaken writes The Constitution Failed. It Secured Neither Peace nor Freedom. This article should remind us of how words on a document do not protect freedom. Protection relies on humans committed to those principles to defend them with violence.

One of the fundamental principles encoded in the Constitution is the Second Amendment, which protects our right to keep and bear arms for the purpose of self-defense and defense of others. Whenever we see foreign governments violate the rights of individuals, Americans lament “if only they had the Second Amendment…”.

The larger purpose of the Second Amendment remains customarily unsaid. It is to empower the people to have the necessary means to mount an armed insurrection to remove a government, when it has fallen into tyranny. The Declaration of Independence was an act of insurrection, which founded the United States of America. The Second Amendment preserves the tradition that brought the country into existence.

What endangers the American people today is the growing apprehension toward being able to discuss what would constitute justifiable use of force, as envisioned by our Founding Fathers in authoring the Second Amendment. The Boston Tea Party suggests that an act of taxation without representation crossed a red line. Absent other examples, that remains our gold standard as a comparable. Has America experienced usurpations and acts of tyranny that far exceed the historical standard? Without a doubt. Have the goal posts moved on where to draw the red line? Without a doubt. However, without the freedom and the intellectual honesty to have that academic conversation, the American people will not know where the red line needs to be. Without a proper basis in rational thought, the danger is that individual Americans may decide unwisely for themselves, and then it will be too late.

Therefore, we should have that discussion sooner than later.

Retaliatory Force

What is the ethical framework for how to respond to the unethical behavior of others? When is it permissible to use retaliatory force?

Something that confounds our reasoning is not having a thought-through ethical framework for how to respond to the unethical behavior of others. This applies to violence, coercion, lying, and other forms of trespassing.

This is why we see widely varying opinions about politics. Most recently we see Sam Harris beclowning himself in support of opposing Trump by any means necessary, including to lie, cheat, and censor. MAGAs see Trump’s actions as justifiable retaliation. Others say how dare he?

Has anyone seen a treatise on the ethics of self-defense and mutual defense (economic, legal, reputational, physical force, etc.)? Seems like a major topic that is given insufficient thought, as people are operating without guidance on such matters. “Cancel culture” emerges.

For example, if public institutions are captured, lying, and coercing, what range of retaliatory behaviors are within the realm of ethical responses that should be employed?

The muddiness of this topic is exemplified by the left’s view of DeSantis being authoritarian in enacting policies that retaliate against corporate power colluding covertly with the federal government and global elites. Whether such actions are considered pro-liberty or authoritarian depends on perspective. This divide is a cold civil war.

Sadly, the ethics of retaliatory force is a topic outside the Overton Window. We are unable to have an intellectual conversation in public, so no one can figure out the red lines, responses, and rules for this cold civil war. Thus, random flailing volatility will abound.

Even Sam Harris invokes self-defense (against an asteroid impact) to justify the actions against Trump. Trump is accused of going against peaceful transfer of power (some calling it an insurrection), after his own Presidency was attacked by the unpeaceful transfer of power, as presaged by text messages between Peter Strzok and Lisa Page. Trump’s term in office was under constant attack by the Russia Collusion Hoax based on the Steele Dossier, the falsified FISA warrant to surveil Carter Page, and impeachment trials.

Here is Sam Harris’ response. https://twitter.com/alexandrosM/status/1560355035149582337?t=CKrEcUpP5HpsyUeawM6JFw&s=19

Retaliation and reciprocity lead to an infinite regress in escalating tit-for-tat retribution. After a while of this back-and-forth, no one can remember who started it, nor the threshold that was a red line crossed. It becomes intractable like the Israel-Palestine conflict, where each side considers the other the aggressor.

After years of chaotic cold civil war, who is going to remember whether America fought against a Russian influence operation abetted by Trump, whether Sam Harris defended the Earth from an asteroid impact (Trump’s fault), or whether Trump fought back against the career bureaucrats and intelligence community aligned against him?

Carriers need to stop selling dumb pipes

I was not happy with my article Carrier Billing and Micropayments, when I first published it over a year ago. I did not feel that the ideas I was trying to communicate were distilled into a coherent formulation. What follows here is a second attempt at trying to convince Communications Service Providers (CSPs) to stop selling dumb pipes.


Most CSPs are old incumbent carriers with large loyal customer bases, established business models, and products that are substantially unchanged for decades. These enterprises are risk-averse. There is little tolerance for changes that would be disruptive to how business is run.

CSPs are in the business of selling dumb pipes (e.g., Internet access, mobile phones). The dumb pipe business is experiencing decreasing revenue per bit. CSPs know that this trend of diminishing profitability is unhealthy, and they are highly motivated to expand into new products (e.g., video).

Since the rise of the Internet, CSPs have seen Over The Top (OTT) services (Internet platformed services) thrive. OTT providers have even invaded the CSP’s spaces. While CSPs expanded into television and video services, OTT video services like Netflix and Hulu caused many customers to terminate their traditional television services. Customers prefer unbundled video streaming. This is especially true now that Disney Plus, ESPN+, HBO Max, and other premium video packages have become available à la carte (no longer exclusively bundled with television service). Unbundling of video services is once again relegating CSPs to selling dumb pipes, which undermines their efforts to expand revenues up the value chain.

CSPs have stodgy business models, because they are afraid of competition further eating into their revenue. CSPs suffer from their inability to formulate new product strategies to better monetize 5G investments. Technical features like network slicing, low latency, higher reliability, low power, high bandwidth, expanded radio spectrum offer possibilities for innovative applications, but carriers have struggled to translate such potential into desirable products beyond the standard offerings for the already saturated market for mobile phone service with mobile data.

From Tom Nolle:

Other articles:

Beyond 5G mobile and fixed wireless features, CSPs also have ambitions of expanding revenues through Edge Computing and “carrier cloud”. CSPs view the construction of their own cloud infrastructure in their own data centers as a core competency that is strategically important to the operation of the Network Functions that provide their communications services over their own network infrastructure.

Again, from Tom Nolle:

CSPs have ambitions to offer products to their customers based on carrier cloud, but they suffer from competition from hyperscalers (AWS, Microsoft Azure, Google Cloud Platform, Oracle, IBM). They aim to leverage their own data centers to provide cloud services for Edge Computing at the provider edge, believing that low latency in the last mile to the customer will offer performance advantages to certain types of services. Unfortunately, there is no evidence that such an advantage exists for CSPs. Performance sensitive components would likely need to be deployed at the customer edge in close proximity to the customer’s devices (such as for near real-time control of industrial processes). For all other types of services, it is difficult to see how regional CSPs can compete on price, scale, and reach against hyperscalers, who have global reach and performance characteristics that are not materially disadvantageous for those use cases. If customers need the performance, they will need computing at the customer edge. Otherwise, when their requirements are less stringent, public cloud infrastructure from hyperscalers is sufficient and economically advantageous.

CSPs must become more open to transforming their business models to find better revenue opportunities. They should look to Apple’s market success as one example of how to think differently. Apple forged a lucrative business model based on their iPhone and iOS ecosystem by taking a 30% cut of third party revenues earned by distributing applications through the Apple App Store. Because the potential for applications and in-app purchases is unbounded, the opportunities are enormous for Apple to earn revenues based on the innovations and work of innumerable third-parties using Apple’s platform. This is proven out by Apple’s incredible financial performance since launching this ecosystem.

CSPs should look to where their own businesses have strengths and advantages. CSPs have a large and established customer base, who entrusts the carrier to take automatic payments every month. That kind of trust relationship and reliable revenue stream is precious. Carriers have not learned to monetize that relationship with OTT service partners or extend such relationships to third parties, as Apple does. One of the biggest impediments to online businesses converting sales for digital subscriptions is the resistance among customers to trust the business enough to create an account and authorize their payment card for automatic recurring payments. That lack of trust is an enormous barrier for most businesses. CSPs can leverage their advantage in Carrier billing to enable micropayments and easier monetization of third party services through the carrier’s infrastructure, billing, and payment platforms. This would enable CSPs to apply Apple’s business model to charge third party services a percentage of subscription fees by owning the customer relationship and the monetization of those third party services.

Let’s explore a concrete scenario to illustrate this point. As a customer of online digital services, each of us has routinely been the victim of multiple unscrupulous vendors. One crooked technique these vendors employ is to be unresponsive to termination requests for subscriptions that have recurring monthly payments automatically charged to a payment card. Sometimes such paid subscriptions are opted in by misleading a customer to try a free introductory offer. Often, intervention from the bank or payment card company is required as a remedy. These kinds of costly and upsetting incidents ruin it for all online digital services, because customers become wary of authorizing payments for any business whose reputation is unknown. Every time a customer shares their payment card information with another vendor, it is a calculated risk that the vendor could be unscrupulous or that the payment card information can be stolen by a data breach (hacking). After being burned, most people would be extremely hesitant to subscribe to a dozen low cost ($0.99 per month) content providers (i.e., magazines, journals, newspapers, etc.), each taking payments separately.

However, for a customer already being charged $200 per month by a CSP for their family’s multiple mobile phone and data services, adding an extra twelve $0.99 charges to their bill (an increase of less than 6%) with the peace of mind knowing that the carrier’s billing dispute and adjustment processes are reputable, friendly, and reliable is a comfortable commitment to enroll in. Now, imagine every product company taking advantage of this easy entry into the market for digital subscriptions, where they would otherwise have found the barrier to entry too daunting. You will see connected running shoes, connected tennis rackets, connected exercise equipment, connected vehicle dash cameras, connected home security cameras, connected home appliances, connected irrigation systems, connected pool circulation systems, connected everything become viable market opportunities for the smallest (and most innovative and entrepreneurial) of vendors. If CSPs bundled monetization with access to their 5G capabilities and their Edge Computing resources for a cut of the third party service’s revenues, that arrangement becomes even more attractive to innovative and entrepreneurial startups who may build the next killer app that no CSP could dream of themselves—and that would be impossible to nurture into existence through partnerships.

For CSPs who envision that the Internet of Things (IoT) will provide new revenue streams in high volumes, they must realize that for things to be connected to the Internet in an economical way, the digital services associated with those things must be monetizable easily and with low barrier to entry. For there to be sufficient uptake, not only do ordinary physical things in everyone’s every day lives need to be connected, but it must be inexpensive and convenient. Technical capabilities, convenience, and low cost come about by leveraging the CSP’s infrastructure, services, monetization platform, and established relationship with the customer base.

As a stodgy incumbent, a CSP is resistant to revamping how they do business. Their belief in their products is entrenched. They believe their own role in the market is entrenched. Incumbency and entrenchment are impediments to transforming their business. So long as CSPs cling to the belief that they must defend their declining revenue-per-bit dumb pipe business against OTT services, CSPs will not be motivated to engage in transformation. They need to understand that their advantage is not in dumb pipes. Their advantage is in owning strong customer relationships that can be monetized on behalf of third party services that are unbounded in potential revenue opportunities. Digital services want to receive payments from subscribers, and CSPs can broker this through their own reputable, ethical, and trust-worthy billing and payments platform.

CSPs must move away from primarily selling dumb pipes. They should re-orient the business to enable an ecosystem that uses the CSP’s infrastructure and platform to sell digital services from all vendors to the installed base of loyal customers. This will open up unbounded opportunities for passive income as all the risk to develop innovative new products based on OTT services is borne by third party digital service providers, while the CSP reaps the rewards of their use of the CSP’s ecosystem.

Bus factor

Observation: management is obsessed with assessing all kinds of risk and their mitigations. This includes technical risk, financial risk, schedule risk, market risk, security risk, and others. This typically does not include bus factor.

One of the biggest risks is the concentration of knowledge and expertise in too few individuals. This is known as bus factor. How many teams measure and report on bus factor, and actively mitigate the risk of bus factor falling to 1?

Our Democracy – what it looks like

The establishment elites and regime apologists routinely accuse their political opponents as being a threat to “our democracy”. What does our democracy look like?

Democracy is disempowerment. It directs public activism to elections as the means of exercising power, concentrating power in elected representatives. They want to channel people’s energy into voting as the method to enact political change. They want to manufacture consent of the governed, acceptance of a mythical social contract, and lend legitimacy to a representative government. Institutions are erected to concentrate power and control into the chosen few, while diffusing the cost over the many, who are subjects to being ruled over (administratively, legislatively, and judicially).

Democracy is controlled opposition. Once the public is convinced that voting is their most important channel for enacting change, then elections can be controlled via ballot access. The nomination process to become an election candidate is designed by the party elites. It is an oligarchical establishment controlled system, where big money, big influence, and big crony interests dominate the party leadership. Primary elections are openly rigged, as the party Rules Committee routinely tilts the playing field to favor their preferred candidate and disfavor dissidents and outsiders. The manner in which Republican and Democrat nominees are chosen by denying access to unacceptable candidates and allowing access only to those candidates acceptable to the party establishment is identical to how totalitarian regimes in China, Russia, and Iran control ballot access.

Democracy is corruption. Once in office, democratically elected officials are corrupted by lobbying, bribery in the form of campaign contributions, and being able to take advantage of insider knowledge of pending regulation or legislation to make timely stock trades prior to government actions causing large movements in the stock market. Nancy Pelosi’s net-worth is a good example of this phenomenon, as she has accumulated over $135 million in personal wealth on a $210,000 salary as a member of the US House of Representatives for nearly her entire adult life. The gains in net worth while US senators and representatives are in office is obscene.

Above all, democracy is majoritarian rule. It is a partisan, tribal, collectivist approach. Majoritarianism is a non-recognition of minority preferences and rights of individuals. A moral society places rights above all else, as human life is the standard of value that everything is measured against and that human behaviors work to preserve and advance. When a majority gets to decide, individual preferences that are not in agreement will be disregarded. This is entirely immoral where such decisions belong to the individual. (How would a democratic decision-making process work between two wolves and a sheep regarding what to eat for dinner?) Democracy is antithetical to individual rights.

Majoritarianism leads to institutional capture, regulatory capture, and ideological capture in courts and juries. Community organizing (activism toward rallying popular support for some political cause) grows a block of voters to exercise their power to place elected officials into power. These officials appoint political allies into non-elected offices as career bureaucrats that continue to advance the political agenda beyond elected terms of office. These agencies are usually responsible for writing rules, codes, regulations, and policies that are imposed upon the public with administrative punishments (fines, licensing, credentials, permits, etc.). When organizing is able to form a large enough voting block, this concentration of power and the consequent shaping of the bureaucratic make-up lead to institutions and regulations becoming captured.

Equally insidious and possibly more treacherous, majoritarianism results in the government agents who are responsible for the system of justice to discard objectivity and impartiality. Police selectively enforce, and they target groups with bias. Prosecutors selectively prosecute, harshly charging those they target for punishment, and being lenient toward their allies. Judges, who have near-supreme decision-making power over their courts, are emboldened to discard objectivity and impartiality, as groups become more polarized ideologically. When a judge feels safe to side with a strong majority, instead of being true to their oath to protect the constitution and following legal precedent where applicable, they have near-absolute power to make tyrannical and sinister decisions over people’s lives in service to the majority and in violation of individual rights. Moreover, even an individual’s right to trial by jury becomes powerless if their community has been captured ideologically by an overwhelming majority. This becomes the predators-and-prey dinner party manifested into society.

Finally, democracy is divisive. When the stakes are so large and elections are winner-take-all, as in America, people will organize culturally along political left-right lines in the fight for gaining a majority. As the levers of power grow and become more corrupt, the stakes become larger, and the political divide becomes more extreme. Truth itself will become distorted as truth-seeking institutions in journalism, academia, and science become corrupted in service to politics. Noble lies become the tool to control the narrative for the regime in power. Censorship is the method to sustain those narratives. The struggle for power is all-consuming. The country naturally tears itself apart.

This is what democracy looks like.

Indirection – evasion and circumvention

Following up on indirect aggression, we can see that indirection is a technique that is used in many ways to evade responsibility, conceal involvement, and circumvent regulation and authority.

  1. Despite a moratorium on gain-of-function research, NIH funded gain-of-function research indirectly by funding EcoHealth Alliance, which then directed funds to the Wuhan Institute of Virology.
  2. Missouri AG Eric Schmitt is suing the Biden administration for colluding with social media companies to censor on behalf of the US government. This is an attempt at circumventing the Constitution’s first amendment protection of free speech, which prohibits the government from censoring. Nancy Pelosi among other government officials have threatened to regulate tech platforms unless they censor “disinformation” and “fake news”. The CIA’s Operation Mockingbird illustrates the government’s enduring interest in controlling speech to advance the regime narrative.
  3. The government frequently acts through intermediaries to preserve plausible deniability. Intelligence assets are used to do the dirty bidding of our government, whenever they want to hide their fingerprints. Consider the role of National Endowment for Democracy (NED) and their connection to the CIA in destabilizing foreign governments toward regime change and color revolutions.
  4. The US and its NATO allies are currently engaged in a proxy war against Russia using Ukraine.

Hydrogen storage – mitigating unreliability


Sabine Hossenfelder
produced an excellent video about renewable energy storage to mitigate the unreliability of sun and wind. I would like to focus on the hydrogen storage segment of this.

Hydrogen storage being cheap should be explored more. The biggest problem with hydrogen is the danger of storing it as pressurized gas, which requires significant volume and strong materials. The hazard to be mitigated is fire that causes a powerful explosion of expanding gas under high pressure.

The solution to hydrogen storage is metal hydride, which would provide higher density storage than even pressurized gas. Another benefit of metal hydrides in the form of powder or tiny beads is that they are stable at atmospheric temperatures and pressures, they are easily transportable, they are easily stored in small tanks of vehicles, and safe even if the tank is damaged by vehicular collision. Therefore, it is foreseeable that metal hydrides (hydrogen fueled internal combustion engine) would be a viable alternative to gasoline and diesel fueled ICEs in today’s vehicles, especially given that the exhaust from combusting hydrogen is water vapor.

The next problem to solve would be to develop a metal hydride ecosystem, so that the life cycle of “charging” them with hydrogen to fill a vehicle, and then returning spent fuel to the fueling station to “recharge” is as convenient as gasoline/diesel filling stations. We can imagine this being solvable, because it is analogous to refining petroleum and delivering refined fuel to the fueling stations, except with the added return path of the spent fuel back to the refinery (hydrogen production facility, where solar/wind/nuclear power is converted to H) to “recharge”.

I’m a proponent of thorium molten salt reactors (MSR), such as LFTR, for producing electricity. Combining modern (passively safe) and reliable nuclear power generation with hydrogen production (using electrical power to split water molecules) and storing hydrogen in a metal hydride seems to me to be a good long-term solution to replacing gasoline and diesel fuels for transportation.

Digital Economy of Social Cohesion

This Web2 era of the Internet has culminated in the concentration of economic power in a few of the largest corporations, a phenomenon that is termed Big Tech. Facebook (Meta), Amazon, Apple, Netflix, Google (Alphabet) are known as FAANG, the dominant Big Tech players. Centralization of control and concentration of power go hand in hand. This control is being used for social engineering, which is divisive, and it is destroying social cohesion.

Web2 is described by Britannica as:

the post-dotcom bubble World Wide Web with its emphasis on social networking, content generated by users, and cloud computing from that which came before.

https://www.britannica.com/topic/Web-20

Digital Economy

The digital economy that has emerged from Web2 is based on either extracting fees from users, as Netflix does with subscriptions and Amazon does with Prime, extracting profits from selling goods as Amazon and Apple do, or selling ads as Facebook and Google do. In each case, the business model relies on positioning the Big Tech company as the dominant supplier in the supply chain.

If you produce movies, you have to go through Netflix to reach your audience. Producers of goods have to go through Amazon to sell to your customers. If you produce iPhone apps, you have to go through Apple’s App Store to offer apps to users. If you want to advertise, you have to go through Facebook and Google to reach your audience. In every case, Big Tech is an intermediary that gets rich as the middleman.

Crypto Payments

One feature of Web3 is the incorporation of digital currencies (crypto). This would disintermediate payments by potentially eliminating banks, credit card companies, and payment processors. The payer and the payee would transfer funds directly with a transaction on a blockchain, which itself has no controlling entity and is therefore decentralized (assuming we are talking about Bitcoin, not some shitcoin). Financial transactions paid in crypto require no middlemen. Digital transactions have concentrated power into Big Tech because integration with the fiat financial system is expensive and subject to onerous regulation.

Integrating a crypto payment protocol natively into the Web is a game changer. Not only would it begin to decouple commerce from the fiat financial system, it should also begin to alter the relationship that users have with service providers and each other. Fiat payment processors impose an asymmetric relationship between participants: merchant and consumer. Crypto eliminates that asymmetry by enabling anyone to send funds to anyone with an address who can receive them.

Monetizing with ads destroys Social Cohesion

Google and Facebook have thrived on advertising dollars because of the asymmetrical relationship imposed by the fiat payment system. The Social Dilemma is a Netflix documentary that explains how the ad revenue model provides social media companies perverse incentives to design systems that encourage harmful behavior among the user base. Engagement becomes divisive. Information bubbles form. Users become addicted to dopamine hits. All to lure more eye balls and clicks so that advertisers can be charged for more impressions and conversions. Users hate seeing ads, but it is the price they pay to receive free services, as their engagement is monetized. The users become the product that is sold to advertisers.

Monetizing without ads brings Social Cohesion

How does eliminating fiat asymmetry fix this? Users on social media are content creators. Their opinions are an organic source of reviews, endorsements, and complaints. Every day the most compelling content goes viral because the audience is won over and engages enthusiastically.

What if a decentralized social media platform, instead of directing advertising dollars to Big Tech, rewarded users for content creation and promotion?

Users could be paid to post quality content with their compensation being proportional to the positive engagement they receive from others. This could be achieved through tips from the audience and from promotion fees charged for boosting content. The key is rewarding users for positive contributions. This institutes an incentive structure that increases personal fulfillment and social cohesion. This is what we want to enable with Web3.

Risk-Reward of Entrepreneurship

Entrepreneurship is characterized by willingness to take on higher-than-normal risk in pursuit of outsized reward. To achieve outsized rewards, one must be willing to accept higher risks, because risk and reward are proportional. Success comes from skilled assessment of what risks are worth taking for the rewards that can be earned with respect to capital accumulation (growing the business), production capacity, revenues, profits, market share, innovation (bringing superior products and services to the market), and customer satisfaction (making a positive difference to society).

Start-ups pursuing highly uncertain goals on the frontier of human innovation are at the extreme end of the risk-reward spectrum. Near-certain failure is assumed by outsiders. Most people believe the pursuit to be impossible. Only the entrepreneur has the vision and courage that are uniquely exceptional to overcome the status quo. The culture of a start-up is defiant, contrarian, and non-conformist.

A start-up’s market is initially non-existent because demand follows supply. Supply is zero until the product is produced and its value can be demonstrated to consumers. People could not have imagined the product until the invention brought it into reality. Invention creates a market, where none existed before. Before the automobile was invented, the market for transportation could only imagine a stronger, faster horse. Once an automobile could be supplied, consumers demanded it.

Contrast a start-up with an established corporation. An established corporation has mature processes, regimented procedures, and formalized governance. Standards, guidelines, and best practices are enforced through reviews and approvals for compliance. The intent is to reduce and mitigate risks: financial risk, schedule risk, technical risk, security risk, and market risk. Knowing what has proven to work, it is imperative to institutionalize delivering quality reliably and consistently to engender trust with customers and shareholders. The culture of an incumbent is compliant, conformist, and standard-bearing.

Entrepreneurship often involves recognizing that what has worked for the incumbents can be revolutionized. Processes can be more efficient. Labor can be automated. Products can be better designed or entirely obsoleted by the next generation of technology. Business models including the relationship with customers can be changed (i.e., a perpetual license can be replaced by a subscription). The goal is to win sales from customers by having a competitive advantage. Entrepreneurs seek to disrupt the market for existing incumbents.

Incumbents are intent on protecting their market position. Risk is ever-present that a competitor may win out. New up-starts entering the market are disruptive to the market. There is the risk that an established business can be made obsolete. Obsolescence is almost inevitable, as we are continually advancing to improve quality of life. Danger exists for incumbents who stubbornly cling to their established ways, eschewing novel innovations that are causing the industry to evolve. Incumbents may even resort to erecting barriers to entry through lobbying and regulatory capture. But the relentless march of progress never stops.

There is an uncomfortable tension between maturity (protecting what is proven to work) and novelty (inventing better ways of working). Culturally, it is very difficult for an incumbent to build disruptive technology that threatens its own business, even though it knows this kind of disruption is necessary to make a better future. This clash in cultures is usually overcome by entrepreneurs building start-ups, which are unencumbered by the status quo. The freedom to explore disruptive innovations allows a start-up to break all the old rules and ignore every self-imposed constraint that would hold back an incumbent from going against its established know-how. An incumbent’s financial strength allows it to forego risky experimentation, which is prone to failure, and watch the landscape for successful start-ups that can be acquired before they grow to become a competitive threat. In so doing, an incumbent gets the best of both worlds. It can protect its market position while also benefiting from risky bets taken by entrepreneurs that prove successful.

When an incumbent acquires a start-up to absorb successful innovations the clash in cultures becomes apparent. There is a desire to incorporate the smaller start-up into the larger incumbent’s organizations, and subject them to mature policies, processes, and procedures. Often, what is discarded are what made it possible for the start-up to be entrepreneurially successful: the freedom to be agile, rule-breaking, disruptive, and anti-establishment. The incumbent usually incorporates innovative technology but resists incorporating innovative culture and spirit, especially entrepreneurial risk-taking.

Insights into innovation