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July 29, 2024 • 36min
Pattern Breakers: Which Startups Change the Future?
Pattern Breakers
In this special episode of Pattern Breakers, host Mike Maples Jr. of Floodgate joins LinkedIn founder and legendary investor Reid Hoffman for a conversation on Hoffman's podcast Masters of Scale. Mike discusses the insights he's gathered from decades of investing, inflection theory, what the latest AI sea change means for the future of business, and ideas from his new national bestselling book, Pattern Breakers.
Pattern Breakers: Which Startups Change the Future?
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Key Takeaways
- Inflection points are crucial for startups to change the subject and fight unfairly against incumbents
- Non-consensus thinking is more valuable than just being contrarian - it's about pursuing unexplored ideas authentically
- Great startups often resemble social movements rather than traditional marketing approaches
- AI represents a "sea change" towards an era of "mass cognition", creating massive opportunities for startups
- Simulation capabilities enabled by AI could transform fields like drug discovery and biology
- Every professional activity will likely have an AI "copilot" within 3-5 years
- Optimism and doing your personal best are key habits for success as an entrepreneur and investor
Introduction
In this special episode of Pattern Breakers, host Mike Maples Jr. of Floodgate joins LinkedIn founder and legendary investor Reid Hoffman for a conversation on Hoffman's podcast Masters of Scale. Mike discusses the insights he's gathered from decades of investing, inflection theory, what the latest AI sea change means for the future of business, and ideas from his new national bestselling book, Pattern Breakers.
Topics Discussed
Inflection Points and Non-Consensus Thinking (4:46)
Mike Maples explains his theory of inflection points as crucial for startups to succeed against incumbents:
- Inflections allow startups to "change the subject" and fight unfairly against established players
- An inflection is a turning point that causes people to think, feel and act differently than before
- Examples include the GPS chip in the iPhone 4S or regulatory changes enabling telemedicine during COVID
He emphasizes the importance of non-consensus thinking over just being contrarian:
- Non-consensus is about independence of thought and pursuing unexplored ideas authentically
- It's "willingness to go down a rabbit hole of what you're interested in for its own sake"
- This allows founders to "earn secrets about the future" that others miss
Recognizing Good Inflection Points (9:20)
Mike outlines his "stress test" for evaluating potential inflection points:
- Identify the specific new thing enabling the inflection
- Determine why it's radically empowering and who benefits
- Assess the empowerment conditions required for it to take effect
He notes that "timing may be the biggest risk of them all" and this process helps improve the odds of getting it right.
Movements vs Traditional Go-to-Market (18:24)
Mike observes that many successful startups resemble social movements more than traditional marketing approaches:
- Movements start with a minority who feel grievance with the status quo
- They accumulate early believers who co-create the future with founders
- Great startups "force a choice and not a comparison" with incumbents
He cites Airbnb as an example, offering a fundamentally different choice from hotels rather than just competing on features.
AI as a "Sea Change" (21:06)
Mike views the current AI wave as more than just an inflection point:
- He calls it a "sea change" towards an "era of mass cognition"
- This follows previous eras of "mass computation" and "mass connectivity"
- He believes startups will have major advantages in this new paradigm
Mike notes that many AI startups struggle to articulate fundamental insights beyond just leveraging the technology:
"I get pitched by startups all the time where I'm like, I can totally see why people will want this...but I don't understand why Sam Altman's not going to have a demo in 90 days that puts you out of business."Non-Consensus Views on AI (23:22)
Mike and Reid share some of their non-consensus perspectives on AI:
- Mike believes startups will have huge opportunities, contrary to views that incumbents have all the advantages
- Reid thinks people are underestimating AI's potential in fields like biology and medicine
- Mike is intrigued by AI's simulation capabilities for fields like drug discovery
- Reid predicts every professional activity will have an AI "copilot" within 3-5 years
AI Agents and Unbundled Intelligence (26:50)
Mike speculates on a future with trillions of AI cognitive agents:
- Intelligence could be "unbundled" into specialized AI agents for different tasks
- This might lead to marketing to people's AI agents as gatekeepers
- AI opinions like "what does ChatGPT think?" could become highly influential
Startup Pivots and Book Recommendations (28:23)
Mike shares the example of Twitter pivoting from Odeo's podcasting focus as an unexpected success story.
He recommends several books:
- "The Top Five Regrets of the Dying" by Bronnie Ware
- "The 7 Powers" by Hamilton Helmer on competitive strategy
- "The Art of Thought" by Graham Wallas on creative thinking
Advice for Entrepreneurs (31:18)
Mike offers this key advice for aspiring entrepreneurs:
"Pursue ideas where you are intrinsically motivated for its own sake, because the great ideas and the great breakthroughs can't be planned. Think about something that you're obsessively interested in all the time at the frontiers of knowledge."Habits for Success (31:49)
Mike highlights two key habits that have contributed to his success:
- Optimism - believing there's always a solution and a way forward
- Doing your personal best - focusing on your unique strengths rather than comparing to others
On doing your best, Mike shares wisdom from his father:
"Everybody in the world has a set of comparative advantages because there's only one you. And so, ironically, the best way to compete is not to watch what everybody else does. It's to understand how to show up in the world to be your best self."Decision-Making and Mentors (33:01)
When stuck on big decisions, Mike mentions turning to:
- His father (in the past)
- Reid Hoffman
- Coach Matt Mochary, who helps push him to take necessary difficult actions
AI's Potential Impact (34:38)
When asked how he'd like AI to change his future, Mike expresses a desire for it to extend human lifespan:
"I would like it to find a way to let me live longer. I don't want to live forever necessarily, but...there's just so much to know and so many interesting things to do in life. And as I get a little bit older, I realize how many things in this life are going to be constrained from you to ever be able to really do."Conclusion
This wide-ranging conversation between Mike Maples Jr. and Reid Hoffman offers valuable insights into identifying transformative startup opportunities, particularly in the rapidly evolving AI landscape. Mike's emphasis on non-consensus thinking, recognizing true inflection points, and viewing startups as movements provides a framework for entrepreneurs to approach innovation. His perspectives on AI as a "sea change" towards mass cognition highlight the massive potential for startups in this space, while also cautioning against ideas that lack fundamental insights beyond just leveraging the technology.
The discussion underscores the importance of authentic motivation, optimism, and focusing on one's unique strengths as key factors for entrepreneurial success. As AI continues to reshape nearly every industry, Mike's call to pursue unexplored ideas at the frontiers of knowledge becomes even more relevant for those seeking to create truly transformative businesses.
