The Δ4 Theory
By: Nikhil Mishra
Tags: Startup, Kunal Shah, Entrepreneurship, Evaluation, Ceo Skills

Before diving into the Δ4 Theory, first ask yourself a question, What goods and services were more efficient 10 years ago?

It’s an impossible question to answer.

The two key takeaways from this question are

All the efficient stuff is in the future. All the inefficient stuff is in the past.

If you could ask this question to any other creature on earth, you will realize, everything will be same for them. They just wait for evolution to kick in and make them more efficient.

We are constantly hacking evolution by being more efficient through the goods and services we create.

If Efficiency is the most vital element when it comes to assessing an idea to work, whether it will create wealth or destroy wealth. Then let’s look how efficiency can be determined using the innovative theory “The Δ4 Theory”

Every time you help humanity to go from state A (Inefficiency) to State B (more efficient state), you unlock the pot of gold.

Q.1 What is the efficiency score out of 10, for booking a railway ticket from a railway station ticket counter vs IRCTC ?

Every time the Δe is greater than 4 (difference between the efficiency of state A and B) you unlock the pot of gold!

Traits of Delta 4 Behaviors:

1.Irreversible: This is irreversible behavior, you will not go back to the original state.

You don’t go back to the state A (Booking a ticket offline) once you start using state B (IRCTC).

You don’t use the classic digital camera now once you started using your smartphone’s camera.

2. Universal Bragworthy Proposition (UBP) > Universal Selling Proposition (USP)

Every Δ4 company have this UBP where the users who moved to state B will eventually scream about the product/service to people who are still in state A( less efficient state)

3. High Tolerance: Even though some experiences in the new Delta 4 may be broken, you will still not go back to old ways of doing it.

On days when the IRCTC website is not working, you will still not go back to the train station to book the tickets, right? (You wait!)

What do most of the startups do to increase to delta 4?

Cashback and discounts Artificially increase new delta

“Discounts used in Delta 4 creates market share, but in Delta 1 it erodes value”

Why Laundry Startups didn’t boom ? (In India) : Getting a maid is easier than using a laundry app. Therefore Δ4 is not achieved.

But lets look at the places where even Δ4 is not enough

1.Affordability:

Flights vs Trains ( Affordability beats Efficiency)

2. Readiness:

Uber like app in a place with no smartphones, the product will not work.

3. Learning Efforts:

Since you have spent years learning the language “English” and building vocabulary, even if a new language comes with Δ4, you will not move to a new language.

4. Configurations:

A maid in the house will have built a very customized service and getting a new one and ‘training’ her with the same customer service will take a lot of work.

5. Collective Participation:

When delta of the new behavior is created by participation of the masses. In the case of WhatsApp , it will be very difficult to create a better product and still move people.

6. Branded Lanes/verbs: Whenever the state is changing from A to B and it is becoming branded, it is very hard to beat this.

You don’t say “Search it on the internet” instead you say “Google it”

Here comes another question for you,

Can you fake Δ4 or Can you hack UBP ?

Yes! you can fake it with the power of Branding and Marketing.

Brilliant marketers don’t compete in the same delta products, they create their own highway. They create new inefficiencies.

Do you feel that your religion is a Δ4 compared to the others? If you do, you just feel it but actually its not!

1.Influencers: Get the #1 Influencer in the field and the rest will eventually follow

For example: Smaller brands will follow if the bigger brand is onboard

2. Piggyback another Delta 4: you can always piggybank another not so Δ4 product/service with your already built delta 4 product/service.

3. Fake Inefficiencies(FMCG): “You can fake an inefficiency and that can create Δ4 “

Nobody cared about dandruff 50 years ago. FMCG companies created a fake inefficiency and started selling shampoos.

If you fail to plan, you are planning to fail

Founders, strategists, Marketers and Team Managers can use this theory to think, re-think and if required reverse-engineer the existing inefficiencies to find a solution.