Introduction≈ It’s a common, yet limiting, misconception that smaller companies automatically deserve less capital and attention, while larger, more valuable companies somehow deserve more. This notion doesn't reflect the dynamic complexity of the business world, where valuation, innovation, and entropic growth paths define the flow of capital. The idea that we should fund only companies with proven sales and results ignores the anthropic nature of market evolution: it is humans and their shifting desires, rather than static metrics, that guide where capital and wealth emerge. In this article, we'll explore why companies with higher valuations deserve more capital, how this approach generates genuine patrimony, and why focusing on disruptive ideas rather than immediate results can yield powerful returns. We’ll also reflect on the emotional attachments we form—such as our deep affection for the iPhone or the legendary persona of Steve Jobs—and why such attachments signal that certain innovative ventures have tapped into the anthropic core of human society.
The Fallacy of Investing Solely in Companies with Sales and Results≈ When you invest in a company that already exhibits stable sales and tangible results, you're essentially entering a low-entropy environment—one where the margins for explosive growth and the creation of new wealth are already minimized. You are protecting your capital, yes, but you are not truly operating within the thermodynamic expansion of possibility that venture capital ideally seeks. By anchoring to existing income streams, you fail to allow the full spectrum of anthropic potential—new desires, new technologies, new markets—to unleash its disruptive power. This approach, while safe, does not cultivate the fertile conditions needed to sprout new dynasties of innovation and patrimony.
The Importance of Investing in Innovative Ideas≈ Investing in a novel idea at its embryonic stage means placing capital into a high-entropy, high-potential environment. This is where genuine wealth and enduring patrimony find their genesis. When you invest in a fledgling company, you’re effectively supporting an idea that has not yet coalesced into a stable equilibrium—it is a system teeming with energy, ripe for disruptive shifts, and poised to reshape markets and even human behavior. The iPhone, for example, became more than just a device; it captured hearts and minds, merging technology with lifestyle. This profound affection indicates that the product channeled anthropic impulses—expressions of what it means to be human at a given point in time—while simultaneously harnessing economic entropy for sustained growth.
A VC's Primary Focus: Analyzing the Idea, Not Just Sales or Results≈ A fundamental principle of venture capital is to examine the core concept and its potential universal resonance, not just the current revenue streams. Analyzing only sales data or results is a fallacy in the realm of venture capital. Sales figures are but a fleeting equilibrium in a complex, ever-evolving ecosystem. A true VC looks deeper, focusing on the disruptive force of the idea, its entropic capacity to upend current markets, and its anthropic resonance with human desires and behaviors yet uncharted.
Younger Companies and the Expansive Window of Opportunity≈ A company with just a few years of history exists in a longer chronological runway of possibility. Such an entity stands at a point of lower entropic equilibrium, meaning it can still harness chaos to create innovative solutions and new market niches. This prolonged window allows early investors to capture more of the wealth generated as the company evolves from a chaotic, uncertain cluster of possibilities into a stable, profitable ecosystem. The best investments often begin with a swirl of unknowns, rather than a static ledger of known revenues.
Emotional Attachment to Innovative Products≈ When people form an emotional bond with products like the iPhone from Apple and goes to the roots to the parables like Steve Jobs' ideals, they invest more than just money—they invest their trust, identity, and daily rituals. This deep affection signals that the product has tapped into anthropic truths: it resonates with our shared humanity, our social dynamics, and our desire for meaningful interactions. Such attachments are entropic markers—indications that the product has initiated a chain reaction in consumer behavior, propelling the company’s growth and ultimate valuation. changing from Samsung to Apple ecosystem is harsh and viceversa.
The Reality of Bugs and Errors in Complex Systems≈ Complexity is inherently entropic. As a system grows in size and user base, the probability of bugs and errors increases. A company that quickly scales finds itself managing a multitude of interactions, each a new entropic state that could yield unexpected issues. The support teams may become overwhelmed, leaving some consumers temporarily without immediate solutions. In contrast, a smaller, less active company—closer to a low-entropy state—might seem to have fewer bugs or errors, but this is mainly because fewer points of interaction reduce the entropy in play. The formula for this phenomenon could be summarized as:
Formula:If we let U = number of users/visitors interacting with the site, and F = the number of times the company was founded (or the initial founding factor representing the zero-entropy state), then the entropic potential of interaction could be approximated by:Wealth/Entropy Potential = U × (F^U)
This formula is a symbolic representation of how growth in user interactions can exponentially increase the complexity and opportunities for both wealth creation and system imperfections.
Knowing Which Companies Break and Which Succeed Through Entropy and Equilibrium≈To discern which companies will crumble and which will thrive, consider where they stand along the entropy-equilibrium spectrum. According to a perspective inspired by the three laws of thermodynamics, systems naturally progress toward equilibrium. Chaos, in a market sense, can be seen as a state ripe with potential—the closer a company is to a landscape of chaos (untapped markets, unstructured user bases, disruptive content creation), the closer it may be to achieving a form of dynamic equilibrium. Paradoxically, those who cultivate productive chaos in an area where there’s minimal financial risk often create the conditions for long-term stability. If there is already chaos in an environment devoid of substantial financial stakes, introducing capital may accelerate the company’s journey to a stable equilibrium, thus signaling that it will eventually succeed. In simpler terms: companies operating amidst fruitful disorder—where innovation thrives unhindered by short-term monetization pressures—are more likely to find a path that leads to balanced, long-term growth and profitability.
The Eventual Path to Profitability≈Many of today’s success stories, including Amazon and Apple, took years to become profitable. Amazon, for instance, did not turn a profit until seven years after its founding, and Apple struggled financially for years after its IPO. These historical precedents remind us that entropic growth phases are natural. The journey from an anthropic idea—rooted in human intuition and societal evolution—to a stable, profitable enterprise requires patience, capital, and vision.
The Window of Opportunity for Generating Wealth and Patrimony≈Everything in the economic and technological sphere exists within finite windows of opportunity. Apple, Google, and countless other giants had their phases of high-entropy innovation before reaching equilibrium. All companies have life cycles: they begin in chaos, mature into order, and eventually wane. For investors, understanding this cycle and embracing the entropic uncertainty at the early stages is key to unlocking the alchemy that transforms an idea into wealth and patrimony.
The notion that smaller companies naturally deserve less capital is not only limiting but fails to mirror the underlying thermodynamic and anthropic realities of the business ecosystem. Higher valuations signal enterprises poised at entropic inflection points—where chaos, human desire, and innovation intersect to create lasting wealth and patrimony. Investing in ideas, not just sales or current results, and embracing the initial chaos can yield extraordinary returns, forging economic dynasties that capture the hearts and minds of consumers. This path follows the universal laws that guide everything from chemical reactions to human markets: those who dare to navigate entropic landscapes often claim the richest, most enduring treasures.
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