The name comes from a book by Douglas R. Hofstadter called ‘Godel, Escher and Bach‘. It’s a wonderful book, covering topics such as math, science, music, logic, philosophy and more. In that book, Douglas coins the term strange loop to describe the movement through a hierarchical system where you find yourself back at where you started. He points to occurrences of these strange loops in music ( Bachs ‘The Art of Fugue‘ ), art ( Eschers ‘Relativity‘ ) and math ( Godels ‘Incompleteness Theorem‘ ), among others. It’s really a tremendous book, if somewhat intimidating. I highly recommend it to anyone looking for some deep thinking / reading. His last book, ‘I Am Strange Loop‘ tackles the core concept of a strange loop and how it relates to the properties of our mind and the concept of ‘self’. Deep stuff and thoroughly entertaining.
But what the hell does this have to do with business and technology?
Well, people will tell you that in these times, it’s paramount to a startups survival to focus and hunker down in expense reduction mode, to focus on quality and being profitable. This presentation made the rounds in early October from Sequoia Capital. It’s called “R.I.P. Good Times.” In there, they preach that companies should be intently focused on becoming “cash flow positive.”
The funny thing is that’s how most companies should be run in the first place.
Here at 1530, we’re all huge fans of Eliyahu Goldratts work with the Theory of Constraints, especially the first business novel entitled simply ‘The Goal.‘ In that book, Goldratt makes a case that the goal of any company is to make money. Note that this isn’t the same this as distributing profits to shareholders. Non-profits ( NPOs ) still need to bring in money and have revenue, they just don’t distribute the money to shareholders. In the 30+ years since it’s publication, it’s amazing how many people think the purpose of their company is some long, drawn out mission statement. Something nebulous like ‘become global platform for knitting’ or ‘ease customers pain when dealing with sponges”. Those are all well and good but, at its core, your company should make money. Simple as that. That’s where you start and that’s where you’ll end.
Which is exactly a Strange Loop.
Asking the kinds of questions that lead you back to what’s best for your company financially will help steer you in the right direction.
Another reason we liked Strange Loops is because sometimes, it’s very beneficial to simply burn everything down and start over at the beginning. In a company, it frequently pays off to get rid of waste, refocus and ask yourself “is this what we do best.” Jack Welch did this when he ran GE. He famously dismantled or sold off entire lines of businesses that were not either first or second in their given field. Decisions like these will force you to focus on what you do best and not get allured by some sexy tangent or flavor of the month. Removing excess waste and clutter also has a psychological effect. It frees you to think about the future without worrying too much about some bad decision you made in the past. It allows you to move quicker and faster, without a lot of debt weighing you down.
It allows you to get back to your roots as a company.
Another Strange Loop.