12. The OEX-unicorns

Chapter 12



by: Josavere
Startups or unicorn companies are technology companies that have reached the value of one billion dollars at some point in their capitalization process, without going public. 90% of the founders of these companies share a common past, either in the academic or professional field. They are characterized by being digitized, dematerialized, democratized and by their capacity for accelerated growth.

Digitization is a process by which, starting from an analog or optical signal, such as any of the images that we perceive in the real world, we obtain a representation of it in digital format (digital signal).

Dematerialization  is the process by which a value represented in physical form leaves its condition to become an electronic record.

The democratization of a product or service consists of massifying the ability to make the majority of people have access to it.

The capacity for accelerated growth is measured by all the facilities available to simultaneously serve many clients quickly and satisfactorily. The Internet allows the cost of demand to be reduced exponentially through online marketing; OEX essentially have no marginal cost.

Some good examples to analyze are Toutiao - Bytedance (China): a news platform that offers personalized content. Uber (USA): a mobile application that provides transport vehicles with drivers. Didi Chuxing (China): a transport company that provides rental vehicles. WeWork (USA): a company that offers shared workspaces (coworking). Airbnb (USA): a platform that offers vacation or tourist accommodation. SpaceX (USA): a company dedicated to aerospace transport. Palantir Technologies (USA): company specializing in big data analytics. Stripe (USA): a company that allows individuals and businesses to receive payments over the Internet. JUUL Labs (USA): electronic cigarette company. Epic Games (USA): Video Game Development Company.

The term “exponential” means something that is rapidly accelerating, continuously doubling in size or halving in cost, which implies innovative new business models, practically applying exponential technologies; The business model is understood as the way in which an organization creates, delivers, and generates value.

Thinking exponentially implies understanding the variables of the business model that behave in this way, which allows the development of an exponential standard for the use of an OEX and don´t is  easy, because we were taught to think linearly. Thus, if you earn 100 and want to earn 200, you will have to invest twice the resources to double the production. That is linear thinking.

Achieving such a jump is not possible without a motor force that gives the initial launch, with great force, without running over or affecting the work environment. A planned, ordered, and directed change by management with the full support of a board of directors, which complies with the principles of Good Corporate Governance, is required to promote the transition from an innovative company to an OEX.

But the incorporation of variables that do not behave linearly, such as the evolution of calculation capacity or the impact of digital transformation on business processes, allow us to design models that grow exponentially. As a matter of principle, these companies seek a massive transformation; they make extensive use of resources that are not their property; they have information as their greatest asset, so they submit to Moore's Law and Kurzweil's Law of Accelerating Returns.

The main factor that contributes to the accelerated growth of exponential organizations is the ability to plan a service of total relevance to the consuming public, having technology as an ally in the structure and development of the business. With this, the exponential companies that are operating in the world have achieved a great evolution by introducing new ways of offering common services based on agility, accessibility, and low cost. To transform a company that has a culture of innovation into an OEX, exponential thinking must be implemented by developing a plan to discover technological trends using collaborative processes and increasing a massive purpose of transformation.

A platform in which the product or service to be offered is not under the direct responsibility of the company but depends on a large group of independent operators, who use it to gain access to a universe of consumers.

One platform base their success on the development of networking, the brand, and the seriousness of the offer. For that, it is important to have the capacity to structure large masses of people who accept it, jointly with the purpose of developing a better world for all.

The platforms base their success on the development of networking, the brand, and the seriousness of the offer. For that, it is important to have the capacity to structure large masses of people who accept it, jointly with the purpose of developing a better world for all.

The platforms give rise to the democratization of goods and services to go from scarcity to abundance and constitute an excellent tool to counteract the global inflation that is currently present; they can operate in garages working in small circles made up of multidisciplinary people who assume specific roles and not positions. In the circles, roles can be changed at any time, so the development of the business does not stop due to the absence of the person and they maintain the characteristics of agile, modern, and flexibility. This is the true meaning of working in collaborative and autonomous teams to be able to make decisions in the digital age and is part of what is called Holacracy (a form of organization in which authority and decision-making are distributed horizontally, without a hierarchical management structure).

Exponential technologies offer solutions to problems that until very recently seemed insoluble, complemented by a new generation of leaders, capable of interpreting and taking advantage of technological possibilities, to obtain incredible opportunities and benefits, now that technologies are allowing the creation of value from a faster way. Artificial intelligence has changed a lot, and this is due to research and the exponential increase in processing capacity, now that we have computers that are fast enough, small in size, and affordable.

“In computing, the word interface is used to refer to the physical and logical dynamics of interconnection between two independent devices or systems, or between a computer system and its human user, for example, a keyboard and a mouse constitute a user interface between a PC and its user.”

The incorporation of variables that do not behave linearly, such as the evolution of calculation capacity or the impact of digital transformation on business processes, allows us to design models that grow exponentially.

Moore's law, which is not, in the scientific sense, but rather an observation, has laid the foundation for great leaps of progress and Kurzweil's law of accelerated returns that include applied sciences; "Whenever a technology reaches a certain type of barrier, according to him, a new technology will be invented to allow that barrier to be crossed", serve as the basis for OEX to be characterized by having an intention of intensive innovation; they use resources that are not owned by the company extensively and have, in information, their greatest asset.

The algorithm is a series of steps to solve a problem. Similarly, an algorithm, in mathematics, logic, computer science, and related disciplines, is a set of defined and unambiguous, orderly, and finite instructions or rules that typically allows to solve a problem, perform a computation, process data and carry out other tasks or activities.

From the computing point of view, an algorithm is any well-defined computational procedure that starts from an initial state and an input value or set of values, to which a sequence of finite computational steps is applied, producing an output or solution.

Salim Ismail, the main author of the book "Exponential Organizations" founded the Singularity University, aimed at training people who fully identify with a massive and transformative purpose, dedicated to this type of company with very special characteristics because they require workers to help change the world to improve it; willing to experiment and try without having a full guarantee of success in the results on which the salary and permanence in employment will depend because they cannot maintain structures with fixed positions, except for the minimum necessary for routine tasks complemented with the technology that is required to give each self-sufficient group the ability to interact with the others.

The community and the environment receive what represents value to them through automated but personalized algorithms and very clear interfaces to take advantage of the available assets and establish very valuable feedback with all the interdisciplinary and autonomous groups to improve the operation.

They must be very clear about what to measure and how to do it oriented to decision making, proposing everything as an experiment to validate it with the results (trial and error) and software that generate connections, trust, and transparency for the communities that work remotely in Holacracy.

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