the Rainforest Curve. As ideas grow into products, from left to right, their beneficial value to someone increases. That’s the upward curve extending from the bottom left to the top right. The process of value creation is driven by positive-sum behaviors, like collaboration, team-building, and shared risk-taking. Think of the passion that a startup team invests in building their company. You see this behavior manifested in real life by entrepreneurs, designers, inventors, artists, researchers, and innovators. As ideas grow, however, they cross a downward-sloping cost curve, which exerts real-world constraints. Those constraints include capital limitations, finite labor, or scarce resources. The cost curve is driven by zero-sum behaviors, like competition and squeezing out inefficiencies. Reducing the cost curve is what originally gave birth to the field of business strategy, as Kiechel chronicles. The intersection, where the curves meet, is like an invisible brick wall. Most new ideas, great breakthroughs, and startup companies die on the left. Most aging institutions, corporations, and governments die on the right. The crossover is the hardest part. Why is the crossover so difficult? The reason is that, as I’ve written previously, culture in business is primarily the clash between two opposing social contracts . One social contract is based on values of production, with its zero-sum norms. The other is based on values of innovation, with its positive-sum norms. Mais
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