Five Startup Lessons from Sapiens

Mining the wisdom of the species

I recently read Sapiens by Yuval Noah Harari. The whole time, I couldn’t help but see connections to startups. Here’s what stuck out to me through my startup lens:

1. Culture Is the Key

Harari divides reality into three sections: the objective, which exists independently from any individual; the subjective, which exists dependently on an individual; and the intersubjective, which exists dependently on a collection of individuals. Humans rely on the intersubjective to organize themselves into groups beyond biological ties and to accomplish great things. Societal building blocks like law, money, and religion are all intersubjectives. Without them, humans would be doomed to a life of petty tribalism like monkeys in the jungle.

The equivalent concept at a startup is culture. Entrepreneurial elites have spilled endless ink over the importance of culture, just as Harari has emphasized the importance of intersubjectives throughout the book. Culture provides a shared set of norms, values, and goals that organizes a collection of individuals into a team - a micro-society. Founders can provide explicit instructions by setting goals, but culture provides the implicit instructions that cover the vast majority of every employee’s time and decisions.

Sapiens shows that culture is not just a good idea for a startup - it is a requirement. Culture will exist whether the founders design it or not. The wrong culture can leave a company stagnant and dysfunctional. The right culture can unlock progress.

2. Punctuated Equilibrium

Harari divides up human history into several eras, with a revolution marking the boundary between each. The pattern here is punctuated equilibrium - long periods of slow or no change, with short periods of sharp change in between.

Each revolution - the Cognitive Revolution, the Agricultural Revolution, the Industrial Revolution, etc - happens partly or wholly by accident, or perhaps through a small initial change that snowballs quickly. For example, the Agricultural Revolution starts with ancient hunter-gatherers noticing certain natural conditions that increase yields of wild crops. In relatively short order, the hunter-gatherers have become farmers, living lives unrecognizable to the millenia of hunter-gatherer generations before them.

Critically, the Agricultural Revolution brings with it a host of unintended consequences: cities, diseases, professions outside of food production. Not only does the change happen quickly, but its far-reaching consequences do too.

Common business methods like quarterly sales targets or OKRs train startups to think progress is linear and yields predictable results. Sapiens and the history of human progress show otherwise. Linear progress can exist, but it is the exception rather than the rule, and it doesn’t yield the radical, unforseeable change startups depend on to innovate.

Entrepreneurs should be familiar with a similar concept from the world of VC. Investors don’t expect to earn incrementally more for every investment they make; they expect one massive and unpredictable sucess to compensate for their many small losses. The statistical name for such a pattern is “power law.”

Startups need to accept the reality of punctuated equilibrium and power laws, not try to tame them with elaborate plans and models. Fail fast, iterate often, and stumble upon the uninteded revolution that will take you into the next era.

3. Admitting Ignorance

One of my biggest historical takeaways from Sapiens is the change in epistemology that occurred in Europe roughly around 1600 with the Scientific Revolution. Up through the Middle Ages, people thought pretty much all of the facts of the world were known, through a combination of ancient sources, tradition, and religion. The only intellectual task for the select few was to learn all the facts and to interpret them in new ways. (The Victorines, a medieval philosophical school, actually did attempt to learn literally everything - that’s how small people thought the world’s body of knowledge was.)

Starting around the time Columbus discovered the New World by accident, European intellectuals embraced epistemic humility. How could an entire continent exist without mention in any map or book? The first step in kickstarting the Scientific Revolution, which led to the other effects I discuss below, was admitting ignorance.

The same effect happens in miniature at startups. Finding new areas of ignorance is how the company makes progress. Admitting (and acting with) ignorance is the first step in good problem and solution research, the twin pistons driving the engine of product. Startups embracing epistemic humility regularly outcompete established companies who think they know everything about their market.

4. Growth Mindset

As people once thought the amount of knowledge about the world was generally known, so they thought the amount of production in the world was generally fixed. Harari gives the example of a lord and his estate: the lord took for granted that the estate and its peasants produced roughly the same amount every year, only fluctuating with natural conditions like rain or temperature. He would give little or no thought to increasing production with new techniques or technology, as there was little precedent for such increases in production.

The consequence of a “fixed production” mindset is zero-sum gamesmanship. If the size of the pie is fixed, then gaining wealth means taking it from someone else, usually by taxes or conquest. Investment was practically a nonsensical concept, except to finance wars that would bring in more treasure than it cost to wage them. Stagnation begat stagnation.

Once people started admitting ignorance, though, they logically had to adopt a growth mindset; new scientific discoveries made meaningful changes in production, showing that the pie could grow. Growth in knowledge begat growth in production begat growth in wealth, hence Europe’s rise during the Scientific Revolution.

If you’ve been around startups long enough, you have surely encountered the phrase “growth mindset.” Start with epistemic humility, transition into a growth mindset, and use the two to find new punctuation for your company’s equilibria.

Speaking of feedback loops…

5. Feedback Loops

Harari provides several examples in Sapiens of feedback loops, citing them as punctuation of historical equilibria. The Scientific Revolution at its core is a feedback loop of Admitting Ignorance and Growth Mindset: finding a previously unknown area to grow into pushes the boundary of knowledge, which provides a new previously unknown area to grow into, ad infinitum.

Harari also chracterizes capitalism as a feedback loop. Growth opportunities need capital to feed them. Once people understood growth opportunities actually existed, they started investing in them, which grew wealth and created more growth opportunities for more investment. A focus on capital, i.e. capital-ism, is nonsensical in a zero-sum world but emerges naturally in a growth world.

In both cases, the consequences compound, creating an exponential curve - hence the breakneck pace of progress and accumulation of wealth in the modern era.

Every VC is looking for starups with exponential growth. The only way to get exponential growth is through compounding - through feedback loops.

In summary, then, here is Harari’s implicit recipe for growing a startup:

  1. Set up a culture of epistemic humility, growth, and experimentation
  2. Perform market and user research in order to find new areas of investigation
  3. Experiment early and often with products using ides from research
  4. Establish feedback loops and let them compound
  5. Embrace massive shifts to strategy based on successful experiments

Yuval, if you’re reading this: you’ve got a great side gig as a startup consultant waiting for you if you need it.