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Can anyone translate this into language I can understand? > Experimentation is contrasted with another mode of learning that I term Analysis. Classical competi

Can anyone translate this into language I can understand? > Experimentation is contrasted with another mode of learning that I term Analysis. Classical competitive strategy emphasizes learning through analysis (Porter, 1980) whereby, instead of generating real options, entrepreneurs generate option sets and arrive at a decision through optimization (see Delmar and Shane, 2003, for an example). In my study, analysis includes gathering market, product, and regulatory data or developing business plans. Gans et al. (2019) distinguish analysis from experimentation in two important ways. Analysis is “commitment-free” whereas in experiments some irreversible investment in the ideas being tested is inescapable. In turn, the commitment-free nature of analysis implies that it can only yield noisy information, whereas experiments produce high-fidelity signals. I add a third difference, which is that analysis, in and of itself, conforms to standard and routinized practices,⁶ whereas experiments are, by definition, innovative and require counterfactual thinking (Camuffo et al., 2020). This delineation between the two modes of learning described above is also present in the practitioner literature (Bhidé, 2000; Blank, 2013; Ries, 2011). I've been in the software business for a long time. I've been in startups and big companies, and worked with angels and VCs. But I have no idea what any of this means! What is the market for a paper like this? And why can't it be written in plain English?

fergie 5y ago
It is written like an undergraduate essay, which is what it seems to be. Judging by the responses it seems like most people haven't actually read it beyond the title.
wavesplash 5y ago
If it helps, skip to section 6 for the conclusions (spoiler: Angels are). The section you've quoted is academic signaling (in 'entrepreneurship research') to context and differentiate this paper from other research and entrepreneurship books/papers. And yes, I strongly agree with you: perhaps someday academia will embrace plain English and real hyperlinks.
- jkhdigital 5y ago
  And, in the fields which make heavy use of mathematical abstractions, “open-source” proofs written in a language amenable to automated proof assistants.
ExitPlatosCave 5y ago
He's just saying... Two ways to learn about the market. 1 - Analysis He's defining as using data from existing companies, economic trends, etc. Much of this data is relatively low cost and can be fine quickly. Analysis tends to provide insight into existing supply and demand. E.g. How many companies are selling electric cars? How much did the sales increase/decrease this year? Based on analysis, a startup might want to create a new charging station. 2 - Experiments This is where someone puts an offer into the market and sees if there are buyers. Usually these are for unique features, or possibly new products. Example: clubhouse was an experiment He's saying experiments usually cost more, because in theory you are at least prototyping + spending money on marketing/sales + support of early buyers. ____ Analysis looks to identify useful patterns in what is already happening, so factual. Experiments try to find gaps that look for needs that aren't being met, so no behavior yet... So "counter factual". ____ Possibly he's also saying that deeper innovation happens based on experimentation. And he's further asking: Do angel investors support experimentation more than other types of investors.
jasode 5y ago
>Can anyone translate this into language I can understand? (1) "classical competitive analysis" (Porter) would be basing business decisions on market trends. (2) "experimentation" is what many of today's startups call "MVP minimum viable product" + "iteration", or "lean startup" popularized by Eric Ries[1]. So (1) would be more theoretical work in spreadsheets to model market size, risks, projected revenue, etc -- vs -- (2) would be start building something small in Javascript/PHP/C++ on AWS and keep iterating on features to see what "sticks" The (2) experimentation is emphasized lately because cloud infrastructure like AWS makes software experiments very cheap and fast to test business ideas. But (1) classical analysis is often the only choice especially for building physical products requiring upfront heavy capital investment. You can't "cheaply iterate" to build airplanes or launch a constellation of commercial communications satellites. You have to commit billions to build them first based on theoretical market projections and hope customers will buy it. E.g. both Airbus A380 and Boeing 787 were designed by working backwards from market data analysis. Neither had the money to iterate by having the factory build 10 different airplanes. >What is the market for a paper like this? And why can't it be written in plain English? Based on the author's bio, the primary "market" appears to be his PhD thesis advisors: https://www.rotman.utoronto.ca/Degrees/PhD/PhDStudentBios/Amir-Sariri https://www.rotman.utoronto.ca/Degrees/PhD/PhDStudentBios/Am... The secondary market might be HN readers who have no impact on his academic career. [1] https://www.amazon.com/Lean-Startup-Entrepreneurs-Continuous-Innovation/dp/0307887898/ https://www.amazon.com/Lean-Startup-Entrepreneurs-Continuous...
- Robotbeat 5y ago
  You kinda can “iterate cheaply” for SOME constellations. If your satellite can scale down to cubesat or smaller, it’s becoming feasible to iterate relatively cheaply. I’m thinking of the space IoT startup Swarm (of radio space piracy infamy).
- kiba 5y ago
  But (1) classical analysis is often the only choice especially for building physical products requiring upfront heavy capital investment. You can't "cheaply iterate" to build airplanes or launch a constellation of commercial communications satellites. You have to commit billions to build them first based on theoretical market projections and hope customers will buy it. E.g. both Airbus A380 and Boeing 787 were designed by working backwards from market data analysis. Neither had the money to iterate by having the factory build 10 different airplanes. But this is exactly what SpaceX is doing? Ditto with Starlink.
pipnonsense 5y ago
My understanding: how will your company learn and innovate? Hire McKinsey to create a plan for you (analysis) or give a small team resources and autonomy to try something new (experimentation)?
- kiba 5y ago
  Why not both?

fergie 5y ago

It is written like an undergraduate essay, which is what it seems to be. Judging by the responses it seems like most people haven't actually read it beyond the title.

wavesplash 5y ago

If it helps, skip to section 6 for the conclusions (spoiler: Angels are). The section you've quoted is academic signaling (in 'entrepreneurship research') to context and differentiate this paper from other research and entrepreneurship books/papers. And yes, I strongly agree with you: perhaps someday academia will embrace plain English and real hyperlinks.

jkhdigital 5y ago
And, in the fields which make heavy use of mathematical abstractions, “open-source” proofs written in a language amenable to automated proof assistants.

ExitPlatosCave 5y ago

He's just saying... Two ways to learn about the market. 1 - Analysis He's defining as using data from existing companies, economic trends, etc. Much of this data is relatively low cost and can be fine quickly. Analysis tends to provide insight into existing supply and demand. E.g. How many companies are selling electric cars? How much did the sales increase/decrease this year? Based on analysis, a startup might want to create a new charging station. 2 - Experiments This is where someone puts an offer into the market and sees if there are buyers. Usually these are for unique features, or possibly new products. Example: clubhouse was an experiment He's saying experiments usually cost more, because in theory you are at least prototyping + spending money on marketing/sales + support of early buyers. ____ Analysis looks to identify useful patterns in what is already happening, so factual. Experiments try to find gaps that look for needs that aren't being met, so no behavior yet... So "counter factual". ____ Possibly he's also saying that deeper innovation happens based on experimentation. And he's further asking: Do angel investors support experimentation more than other types of investors.

jasode 5y ago

>Can anyone translate this into language I can understand? (1) "classical competitive analysis" (Porter) would be basing business decisions on market trends. (2) "experimentation" is what many of today's startups call "MVP minimum viable product" + "iteration", or "lean startup" popularized by Eric Ries[1]. So (1) would be more theoretical work in spreadsheets to model market size, risks, projected revenue, etc -- vs -- (2) would be start building something small in Javascript/PHP/C++ on AWS and keep iterating on features to see what "sticks" The (2) experimentation is emphasized lately because cloud infrastructure like AWS makes software experiments very cheap and fast to test business ideas. But (1) classical analysis is often the only choice especially for building physical products requiring upfront heavy capital investment. You can't "cheaply iterate" to build airplanes or launch a constellation of commercial communications satellites. You have to commit billions to build them first based on theoretical market projections and hope customers will buy it. E.g. both Airbus A380 and Boeing 787 were designed by working backwards from market data analysis. Neither had the money to iterate by having the factory build 10 different airplanes. >What is the market for a paper like this? And why can't it be written in plain English? Based on the author's bio, the primary "market" appears to be his PhD thesis advisors: https://www.rotman.utoronto.ca/Degrees/PhD/PhDStudentBios/Amir-Sariri https://www.rotman.utoronto.ca/Degrees/PhD/PhDStudentBios/Am... The secondary market might be HN readers who have no impact on his academic career. [1] https://www.amazon.com/Lean-Startup-Entrepreneurs-Continuous-Innovation/dp/0307887898/ https://www.amazon.com/Lean-Startup-Entrepreneurs-Continuous...

Robotbeat 5y ago
You kinda can “iterate cheaply” for SOME constellations. If your satellite can scale down to cubesat or smaller, it’s becoming feasible to iterate relatively cheaply. I’m thinking of the space IoT startup Swarm (of radio space piracy infamy).
kiba 5y ago
But (1) classical analysis is often the only choice especially for building physical products requiring upfront heavy capital investment. You can't "cheaply iterate" to build airplanes or launch a constellation of commercial communications satellites. You have to commit billions to build them first based on theoretical market projections and hope customers will buy it. E.g. both Airbus A380 and Boeing 787 were designed by working backwards from market data analysis. Neither had the money to iterate by having the factory build 10 different airplanes. But this is exactly what SpaceX is doing? Ditto with Starlink.

pipnonsense 5y ago

My understanding: how will your company learn and innovate? Hire McKinsey to create a plan for you (analysis) or give a small team resources and autonomy to try something new (experimentation)?

kiba 5y ago
Why not both?