Restrained Growth

The economic marketplace (as a fitness landscape) is becoming increasingly punishing in outcomes as a result of the decrease in “time-to-live” of information asymmetries. A consequence of such extreme influences is an eventual small concentration of highly fit competitors with large territorial radii (i.e. monopolies – those who captured the asymmetric payout).

Two observations of this modern environment: first, it selects organizations capable of reaching similar high fitness (i.e. “escape-velocity”) usually through a survival strategy of intensive growth. Secondly, venture capital has emerged as a tool to support this adaption: companies who raise venture money are conferred a selection advantage (relative to non-venture-backed competitors) because their primary survival strategy (intensive growth) is enabled.

However, intensive growth is a fragile fitness strategy. It bears increased risk by over-investing an entity’s survival in the existing landscape. Should the landscape alter itself to disadvantage scale operations, those executing the intensive-growth-to-survive strategy could be hamstrung. One modern symptom suggesting an impending alteration is the revelation of the “embedded growth obligations” of public institutions (E. Weinstein). That the late laggards of the adoption curve have begun taking on this growth fascination may signal, in canary like fashion, a decrease in returns from the hyper growth strategy on the horizon. In such event, current companies may seek to be contrarian in action.

In speculation I wonder if a potential counter strategy to survive transition from growth advantaged landscape to a new landscape with unexplored properties might be something on the order of what Jason Fried calls a "calm company".

Returns do not matter if one does not survive (W. Buffet - paraphrased).

Kind thanks to Kanwar Sahdra for his reading in advance