Don't build v2 when v3 will do.

Don't build v2 when v3 will do.

Version 2 of anything is probably an “intermediate state”. Don’t build it. Build whats next instead.

Let’s start out with what I am defining as an intermediate state.

An intermediate state is the point between a current state and a future state. More robustly, it’s an infinite number of possible states between what exists now, and an infinite number of future possible states.

Take a loading bar for example.

The loading bar exists to let you know you are in an intermediate state.

( Or hell. I’ll let you decide. )

You are somewhere between where you are and where you wish to be.

Search bar and cat videos. Button click and delicious delivery food. Rolls you can see through your cloths and your annual recurring fitness goals. Old school opaque oligopolies and “perfect” transparent market competition.

Wouldn’t it be cool if we could leap frog from state to state and skip intermediate states?

No loading bars. No years of diet and exercise.

Just a beautiful future of instant food, your personal ideal physical form and efficient markets.

That would be excellent!

I mean, we feel we know some of the “final” states we want right?

Cant we just jump to the end?

In unassisted biological systems it’s nearly impossible to skip intermediate states.

Humans had to evolve through the ages from one incarnation to the next. No skipping the hard stuff. Hairy to less hairy. Big heads to smaller heads.

Man had to create fire, and with the fire, probably burned down his house.

Lessons learned. Progress made. Intermediate states achieved. Evolution.

Biology likes, and needs, the intermediate states. It’s quite literally how biology makes decisions for itself.

But luckily for us, humans are masters of decision making. We do not need to rely on the luck of the Irish, mendelian segregation and a century or two of favorable climate to make decisions on what our next state will be.

We can choose.

By being able to choose we can skip intermediate states.

In biology we can assist in its decision making.

Edit those genes yo.

In society we can learn from history and make decisions that take us from conflict to peace and skip war. 🤞 A very shite intermediate state that we know we don’t want.

And more practically for most of us , in business, we can choose to skip intermediate states. Preferably as many as possible.

I believe that all intermediate states could inherently create a profitable businesses given a not tiny market size.

Each intermediate state commonly represents some new form of improved ability to compete wether it be added value to customers, a different business model, or operational efficiency expressed by a bump in the bottom line.

Startups are often created around the next intermediate state. Between where market competitors exist and an unknowable “perfect” future state.

Interesting startups skip or incorporate as many intermediate states as they can while still remaining palatable to the market.

A legacy food business might take a product line and make it certifiably “sustainable”. Capturing a single intermediate state between where it is at and where the market wants it to be.

A startup that is interesting often goes 3 steps further. Builds a brand new supply chain, with equitable margin structures for stakeholders, and makes a brand thats cool AF.

A startup that is crazy “ambitious” and/or too early, and thus likely to fail, might go 5 steps further. After incorporating the intermediate states of new supply chain, equitable margins, and a cool brand they would decide that to truly make the world a better place they should have their own cryptocurrency for their woke ass berries and the tokens will give all stakeholders voting rights in the new holacratic DAO that manages the company.

The point here is not that having a DAO run a supply chain is a bad idea. It totally could be a great idea.

The point is that incorporating or skipping too many intermediate states at once is often unpalatable to the market.

Each market has a pace.

Sometimes in markets with a slower pace you need to build the intermediate states just to make the next state palatable for the market in the near future.

You might have to do this even if you already know what the next state is, and that it’s the future.

If this is the case and you can’t handle being the steward of the path dependence gods for the next decade you may be in for a rough time.

In other cases, when the market is hungry for it, you can skip intermediate states. You don’t even need to incorporate them.

A good example is payments in parts of Africa. Roll up to a bar already 10 years ago and you could use M-Pesa to buy a beer via a text message. They just skipped a host of intermediate states of banking and went straight to mobile payments because the market wanted it and they where wise enough, or constrained enough, to skip the drudgery of building out physical branches of banks manned by people playing with fiat all day.

You still can’t reliably pay by phone in the USA, different markets require addressing and living with different intermediate states.

Depending what market you are in, you should be aware of what intermediate state you are building for.

To do interesting and valuable things you should be trying to skip intermediate states if you can or incorporate as many as possible in your next venture.

You should definetly go one state further than you think the market will bear.

This is not some long winded excuse to not push boundaries.

If you go at least one state further, by the time you have executed on it, the market might just be there.

If you build an intermediate state when the market would accept a skip you might still make lots of money but you are definetly missing out on upside for you, your company, and society.

And if you choose to build an intermediate state and someone else skips it you may be totally screwed. Like “Blackberry obliterated by the iPhone” screwed.

But if you skip too many states you might also become webvan.

Know your market. Know what year it is. Skip as many intermediate states as possible. 🚀