As humans we like to put things into categories. It makes communicating and thinking easier. Scratch that. It makes communicating and thinking possible. Categories go hand in hand with words as providing us with crucial compression of reality. Just like a 1:1 map is completely useless (it is the terrain itself), so would be a need to describe every detail of every person or object before being able to make a point. We would never get anywhere.

Not surprisingly then, categories are everywhere. For instance in venture we tend to put things into boxes such as “B2C” or “enterprise software.” Or in academia people study a discipline like “physics” or “chemistry.” The government classifies workers as “contractors” or “employees.” But here’s the tricky part: the world isn’t static and progress undoes categories.

The admonition to “think out of the box” when it comes to innovation is apt. Such thinking is both a source of progress and necessitated by progress. Here are just some examples. As we have deepened our understanding of what matter consists of, some of the historic boundaries between chemistry, physics and biology have stopped making sense. With computers dispatching labor we have erased many of the distinctions between contractors and employees. Self-service consumer grade software is taking over the enterprise market with product-led growth companies outperforming sales-led companies.

If you are trying to invent the new (or fund it), it helps to let go of existing boxes, instead of trying to jam innovative ideas into them. One (Read more...)