Entrepreneurialsm as a Darwinian phenomenon

Amazon is trying to turn the art of internet startups into a science.

At an open event at Stanford yesterday, a couple hundred or so entrepreneurs, VCs, and developers talked about how Amazon Web Services — cheap and elastic storage, computing, message queuing, and payments — could change, or is already changing, their businesses.

“We’re now at a point that business plans really don’t matter,” said VC Randy Komisar of Kleiner Perkins Caufield & Byers. “It’s an iterative process of quickly getting your ideas into the hands of others.”

Komisar, who is writing a book on the topic, admitted that cheap and testable company building makes his job a lot harder, and in some cases irrelevant. “Before — there was a black art,” he said. “We don’t need gurus, we have a market.”

There is a very interesting implication, ie that the setup and transaction costs of new business startups have dropped so low that innovation is now basically a pure Darwinian activity - given a new evolutionary niche (from a technology shock to the ecosystem, say) then entrepreneurialism - like nature - abhors a gap and a darwinian evolution starts up.

What does this have to say about entrepreneurs - in essence the implication is they are no longer unique individuals, but random agents in an evolutionary landscape. Not so much heroic visionaries as blind watchmakers

Can this really be?

In actuality this seems to apply mainly to consumer "presentation layer" services - the digital equivalent of shopkeeping really, so Amazon is merely providing malls for people to populate shops in rather than making everyone build their own shop. Lower cost of entry but fewer opportunities for differentiation.

However a lot of the B2B startups, and infrastructure layer startups (ones where the Amazon grid is not appropriate) are in a different place, a large amount of the differentiation is in the actual architecture.

But for those commoditised "presentation layer" companies, can the individual entrepreneur actually influence anything or is it more a random walk?

The answer is - theoretically - that there is less you have to do to execute well, so the more random aspect (luck, if you like) increases in importance. However, we would also hypothesize that this implies that those fewer parts of execution that are at tipping point moments are more critical to get right.