"Move fast and break things" - Nah, I'm good.
The old era of ‘move fast and break things’ is over.
This realisation struck me this while piecing together an investment prospectus earlier this week. ‘Move fast and break things’ is the default excuse for an early-stage startup to seek the financial runway, and in turn, the leash to accelerate execution, make the mistakes and learn the lessons a little quicker.
An early-stage startup should dynamically evolve in response to their market regulations and nuances, all while accounting for their product stakeholders. In simple speak - a good founder should have a finger on the pulse of current users, competitors, market initiatives/opportunities/threats and translate all that into a product (nee company) roadmap that reflects the best interests of their customers.
For decades, founders have treated regulation as something to worry about tomorrow. But regulation is not, inherently, bad. Bad regulation is bad. And, as our technologies grow more ubiquitous, more powerful, and more difficult to understand, the threat of bad regulation grows. If we do not engage early and constructively in the policy debate, regulator attention will naturally turn towards overcorrection, destroying economic value and crippling startup competitiveness.
It is intellectually inconsistent to preach about a disruptive, billion-dollar vision and imagine it as being free from market considerations. It fascinates me how often entrepreneurs lack a basic grounding in the market hurdles they may face. At a minimum, founders must know who the key decision makers in their market are and think through how and when it makes sense to engage with them. Transactional relationships with them, born of crises, are neither effective nor worthwhile. Continual, consistent dialogue leads to better-informed founders and better, more capital-efficient companies.
Ultimately, venture capitalists take views on high-caliber people, innovative ideas, business models, and the changing nature of markets, using the best data available but operating with incomplete information. Asking the questions above can help to reduce uncertainty over whether entrepreneurs can deal with unexpected challenges that arise from the effects of their innovations. Investing in responsible innovation not only benefits society, it protects the viability of technological progress in a democratic system. For venture capitalists, this is the wise approach.
Example — what Adduco does to leverage data and AI responsibly
From the outset we knew that we could not move fast and break things as a data product if we wanted to maintain adoption, ecosystem cooperation, and consumer trust. Moving fast and negating the time it takes to develop a brand, consumer understanding for the product and respect for the marketplace (competitors and distribution) would not allow us to attain the above. I knew that we should be able to distribute a product and brand that communicates, in relatively simple terms, why our complex algorithms do the things that they do. Would you trust an AI medical diagnosis without a basic understanding of its methodology? No. So would you trust a customer data product that couldn't explain why it draws the conclusions it does?
It’s a no-brainer to think that if we respect the grind and take the time to be able to articulate our complex AI footprint in simple, understandable, and honest terms, our product will be more sustainably successful.
Similarly, we are all familiar with growing consumer backlash regarding unforeseen or poorly understood personal data collection and usage ( 👋 Hey, Zuck, I understand your frustration bro). Regardless of whether the government acts, it is inevitable that AI will be forced to collect, log, and use data in a wholly transparent manner. Ergo figuring that out today will give us a leg up on the competition.
(Our stakeholders = our customers + our data sources + our regulatory authorities)
So by prioritising responsibility for our customers and product - and staying on top of it - we don’t need to move fast and crash into a regulatory fine or encounter a bunch of wildly under-informed Senators. We don’t need to burn precious runway.
Certain things don’t have to be broken if you’re a founder that innovates responsibly.