The most complicated problems in life are systems problems.
The Purpose of Systems
A traveler came across three men working. He asked the first man what he was doing and the man said, “I’m laying bricks.” He asked the second man the same question and he said, “I’m putting up a wall.” When he asked the third man what he was doing, he said, “I’m building a cathedral.”
They were all doing the same thing, but the first man had a job. The second man had a career. The third man had a calling. If it’s a calling, you take care and pride in your work. Every brick has a purpose.
If people feel like they’re laying bricks, they’re in the wrong place. Build to change a system.
Most companies, especially in the real estate tech space, are skunkworks for larger companies in the space. They’re not solving real problems that will have a significant impact on the industry. For all the prop-tech companies built, real estate operational costs haven’t significantly decreased. This is because the core systems remain the same.
Ender is building to change how everything works from the ground up.
Systems Problems
An example system problem is what to look for in a life partner. It’s not one thing; It’s not two things. You need to identify a combination of character traits that align with you. A basic list could be:
- dynamic
- articulate
- attractive
- honest
- compassionate
- reliable
If you atomize each trait, e.g., “find someone who is only compassionate”, then it’s easy. What makes it hard is finding a partner who possesses all the traits. Say you have 20 required, uncorrelated traits, and on average, 60% of people possess each trait. Then less than one out of twenty-five thousand people fit your criteria. Good luck!
The only way to solve systems problems is with systems thinking.
Designing Systems
How to design an effective system requires an understanding of primitives, incentives, and frameworks. The design of the system has cascading effects.
For its size and complexity of workflows, Amazon is the most competently run org in the world. Amazon takes many of the best aspects of the army and implements them in the private sector. SOPs (standing operating procedures) are required. Specific, Measurable, Actionable, Realistic, and Timely (SMART) goals are implemented and measured throughout. Amazon pushes a writing culture where employees and management have to vigorously defend their decisions whether it be project/product-oriented, firing an employee, or promoting an employee.
Horizontal frameworks need to be applied to simplify systems to manageable sized problems. Innovative structures need to be devised and implemented to teach example frameworks for how to solve systems problems. Take a problem we deal with daily—
In enterprise SaaS, almost all basic problems are solved. Best practices are known. A plethora of single-point solution SaaS companies exist. There are known processes to build, market, and sell these products. What’s hard and what’s most valuable are solutions to entire vertical and horizontal workflows. These are the SaaS systems problems, or what Parker Conrad calls compound startups.
Compound startups require an in-depth understanding of a complex system. One part of the system affects every other aspect. How a system is architected from the ground up affects the data model, which will affect reporting and other use cases. Solutions you choose early on have downstream effects. If you aren’t deliberate with your choices, the foundation upon which everything is built may need to be refactored later on. It’s often impossible for legacy players to refactor their foundation, leading to opportunities for startups to enter the space.
Systems Everywhere
Biotech problems are systems problems. Almost every part of the human body has an effect on other parts. There are doctors who won’t operate on your knee if you have gingivitis. We still can’t predict with 100% accuracy how simple single-cell membranes will react in controlled environments.
How top generals run their armies from a logistics, tactical, and strategic perspective is also a systems problem. Government policies are system problems as they lead to second and third-plus-order consequences that are usually unforeseen by policymakers, e.g., when Hawaii wanted lower oil prices they put a price cap on oil, then they had an oil shortage because it became no longer profitable to ship oil to Hawaii.
Our Systems
What makes people effective at work? Bias for action, being correct, delivering results, learning, being curious, thinking big, owning their decisions, etc. It’s not one metric. We need a holistic view.
We need to be deeply curious to figure out how to solve a systems problem. Understanding the system helps us understand the why of laying each brick, which informs the how. What are your most important systems problems?