The Law of Disproportional Consequences

Why this title? I wanted to describe this idea that in software it is far harder to develop the right things. Yet the impact of developing the right product is disproportionally higher than incremental improvements in the way you develop an existing product.

If you look at the history of software companies this is quite clear. Google, Microsoft, Apple and other giants in the software world today were created by a pair of kids in a garage (literally). This is the positive Black Swan that Nassim talks about in his books and a clear indication that in software it is “what” you develop that matters, not “how” you develop it!

The consequence of understanding and taking advantage of this law is that software companies should be spending a lot more money creating products that “fail” than they do now. Just think about it. If Google did not have it’s “labs” would they be as successful as they are now? Almost all of their cool/hot products came from the labs.

How about Apple? If they did not have a crazy guy like Jobs at the helm would they have invested in such complete departures from their original business like iTunes or the iPod?

For a company like the one where I work now, this means that we should be creating ideas about new products at least at the same rate that we create incrementally new products. If we get a 10% success rate with this approach we can be 10/100 times better than what we are now!

In Software there is a law of disproportional consequences, period. The question for us is can we take advantage of it?