This is copied from the email that I sent company-wide. It’s about mindset of innovating and building from first principle (vs working iteratively or building based on what the management tells you)
Let’s discuss the history of ice that involves innovation and working from the first principle. To help with the explanation, let me tell you a story about the advancement of the ice industry as told by Guy Kawasaki, paraphrased to my flavor.
Ever since the beginning of civilization, food preservation has always been one of the (top) human problems. Back then, there were several methods to preserve food, like drying, salting, smoking, and pickling. One of the more interesting ways to preserve food is by chilling it with ice.
Using ice to help households preserve food started by harvesting ice from ice lakes. Ice blocks are cut into transportable pieces and delivered directly to the end customer.
Then humans advanced to transport the ice more efficiently. Instead of delivering the ice directly to every household, ice blocks are transported into a temporary warehouse and then delivered to households as needed. The goal is to preserve the ice for a longer time as ice is created naturally during winter and needed during other seasons when the temperature is higher (putting a lot of ice blocks together in the warehouse will help keep it frozen for a longer time). It also improves the efficiency of how ice gets delivered to the end customers. Ice blocks supply chain was born.
Then later, in 1800 ice factory was born. Instead of harvesting the ice that’s only available during winter, ice is created through artificial refrigeration. Humans grasped the ability to create ice all year round. The factories needed to make ice at scale to make the business profitable. They created a lot of big blocks of ice and only cut it for household consumption as needed.
These days every household has a fridge that can make small ice blocks for themselves. This newfound invention then enables new kinds of use cases beyond food preservation, such as making cold drinks during a hot summer.
Imagine if humanity stopped innovating and kept optimizing how to build the best ice supply chain. Imagine if companies only listened to the complaints of the supply chain worker, optimized how they work, and didn’t bother to stop and think from the first principle on why they need to deliver ice to begin with (clue: customers just need the ice, they don’t care how it’s being procured).
Maybe the innovators of the year 1800-1900 might’ve contemplated these questions:
Do we always need to deliver the ice we harvest directly to the end customer? Can we deliver the bulk of ice blocks more efficiently? (ice harvesting → ice harvesting supply chain)
Why do we need to optimize the ice supply chain, to begin with? Can we create a machine that creates ice? (ice harvesting supply chain → ice factory)
Do we need factories to make ice? Can each individual household make its own ice? (ice factory → fridge)
Maybe in the future, we will not need ice to keep our beverages cold and preserve our foods. Maybe in the future, we will have a blowtorch-like tool for cooling instead of burning. As long as we don’t stop asking questions, we don’t stop thinking from the first principle, and we don’t stop innovating, the possibility is endless.
Innovation is not when we make our team consume and process Google Sheets better and faster. Innovation is when the system automatically contacts our farmers to buy 2 tons of dates and 4 tons of bananas two weeks from now based on customer demand with anticipation of Ramadhan and Eid al-Fitr. Innovation is a step-function change in how we operate, market, build, and consume that solves the first principle problem.
So I encourage you to ask yourself these questions:
Are we blindly listening to users’/customers’ complaints without understanding what they are trying to accomplish? (aimless iteration)
Are we just providing services in response to competitors, the hype of the market, or what has worked in other markets (non-first principle)?
Are we innovating on solving their problem from the first principle?
> Imagine if humanity stopped innovating and kept optimizing how to build the best ice supply chain.
Now imagine the ice industry moving on while the supply chain adapts to frozen produce, there is a weirdness about each of the method. Most companies would let someone else do startups within a vertical, while trying to consistently make returns on horizontal tech. This is most likely to happen in increasingly strong recessions and tight budgets.
Hypothesis: (a) abnormal claims of easy vertical integration is always suspect, (b) horizontal integration is only possible when generics/outsourcing can be of higher quality at a cheaper price, (c) the change in direction corresponds to "Kuznets Swing" or the infrastructural economic cycle. https://studio.ribbonfarm.com/p/perpetuated-beta https://archive.ph/avQU1