A systems and resources driven framework to think about startups — Part 1 of 3
By: Vikas Lal Sahita
Tags: Startup, Product Management, Startup Lessons, Strategy Planning, Startup Life

A systems and resources driven framework to think about startups — Part 1 of 3 Vikas Lal Sahita May 22·3 min read

Network of resources — Image courtesy https://pixabay.com/users/joiom-1638899/ and pixabay

Most people tend to think of startups as an aid or a means to solve a problem. Mostly an invention or a thing could solve problems. The thing could be a service, product or a combination thereof. It could be for profit or a non-profit, private or public, proprietary or open-source. Far too much of our startup “literature” focuses on how to identify a problem, figure out who has it, solve it for them and present them the solution while it is being developed, to enable the closest feedback loop. That’s all correct, except that you’re still missing the big picture.

A startup is not simply a means to solve a problem, it is the culmination of systems thinking to achieve optimal solutions to a given problem, within resource constraints. It is so much wider and more encompasses so much more. We’re going to break down each of these elements and examine these closely and see how each of them works.

The assumptions for this model are:

(1) Every startup wants to gain access to as many systems as it can. Because systems have resources that the startup wants to unlock and use, to enhance value to its product/service and gain revenue from their users.

(2) All startups are competing for these resources, though not in the sense of a win-lose or a zero sum game. The competition is in the way of augmenting these resources and whose intelligence layer is better and provides more relevancy and personalization for their users.

(3) Every resource of every system is finite, though not of identical value. Resources need to be augmented by the startup’s own coding / intelligence layering. I will not speak of supposedly infinite resources, since that would require a separate discussion. These resources are streaming like rivers, and though a continuous supply is on offer, they are not infinite. There would come a time, in the future, when these resources would extinguish, and the startup would need to develop or nurture new systems to generate more resources, relevant to the sustenance of its business model.

(4) There is a growth, g for every resource, which we can consider positive. However there could be wide variance between the growth rates within a system or across systems.

(5) Every resource imported from one system automatically translates into the positive benefit of its utility, but also the cost of its integration, and to the exclusion of what the alternative could offer. Every resource of every system exacts a cost to import and use. One could consider combining and importing further resources for the same function, however, the cumulative result would still not return marginally higher than the effort spent on importing every further resource.

For open source system/resources, the cost may be the opportunity cost of the time and the cost of any customization or modifications. For proprietary platform systems/resources, the cost may be a mix of monetary, time and jumping through other hurdles such as patent and any known bugs etc. As an example, even the users of your product/service, and insights gleaned from their data is an undeniable resource, whereas the cost of accessing and augmenting that resource would carry the inherent cost of securing and anonymizing their data and ensuring the privacy of PII.

(6) In a way its easier to consider resources as energy. Energy is neither created nor destroyed. Energy is simply reallocated from one to another. In the same way, every startup is a system. And each of the resource constraints are a system constraint, inherent to that system. If you take a resource away from one system and apply it to another system, you aren’t really creating anything, you are simply “redistributing” or “capturing” (depending on your stance, respectively, as a gainer/bystander or the system losing out) the energy or the resource and ultimately utilizing that energy in its original or combining or aggregating it or merging it with other resources to form a more powerful resource.

Well, do I hear you ask,

“That’s all good and dandy V, but how do I get this going in my startup?”

I’m going to tell you, in a moment. For in the next part, we’re going to read the practical steps about how would you apply this framework to your startup. Click here to unlock the next part…