EXOs - The New Unicorns
Skynet-As-A-Service for Startup Founders...
Just Give Me The Main Points
For the past five years, investors have sought out unicorns.
Unicorns are companies achieve a valuation of over $1B.
Today, there is a new type of unicorn emerging.
The new type of unicorn that’s emerging is known as an EXO.
An EXO is an Exponential Organization.
An EXO is a company that achieved a valuation of $1B with a team under 10.
Systematizing Singularity University
In the early 2010s, Salim Ismail noticed that some tech companies were growing much faster than others. He wanted to understand why, so he co-founded Singularity University, a place where smart people worked on futuristic technology. By studying these successful companies and talking to lots of experts, he figured out that they were using special strategies and new tech to grow super fast. He put all this knowledge together in a book called "Exponential Organizations," helping other businesses learn how to grow quickly too.
Salim Ismail, founder of ExO Works, discusses in a YouTube video the exponential growth of technology, which is driving changes globally. Ismail explores how digitisation has dramatically transformed the world and enabled technological changes and processes to work in entirely new ways that were once impossible. He introduces Exponential Organisations (ExOs), which are capable of achieving significant performance improvements when using a new breed of organisation structure. Ismail suggests that existing companies should update their leadership, opening up to ecosystems and entrepreneurs before taking change agents to the edge of the organisation to build an ExO.
Summary of the above video
00:00:00 In this section, Salim Ismail discusses the significant changes happening globally, driven by technology. He believes that technology is the main driver of change and he is excited about the progress we are seeing today. Ismail explains the doubling pattern of technology, where once you empower an industry with information technologies, it starts doubling its performance and this will keep going. Singularity University challenges its students to come up with ideas that will impact a billion people within ten years. He gives an example of a team that looked at poverty in Africa and used drones to deliver medicine and food to an area with no roads. Ismail concludes that we can apply advanced technologies to solve global challenges for the very first time in human history.
00:05:00 In this section, Salim Ismail discusses some of the projects launched by his team, including the use of drones to deliver mail for the Swiss Postal Service and launching a 3D printer to the space station. Ismail claims that his team launched about 70 projects, each with the goal of making a significant impact on the world. Additionally, Ismail discusses the importance of updating their curriculum in real time and changing their content, as digitization is rapidly transforming the world. As a result of the shift to digitization, Ismail claims that the best analogy is photography, where we have gone from scarcity to abundance, causing an explosion in the domain.
00:10:00 In this section, Salim Ismail discusses the increasing use of robots in industrial settings, particularly with the emergence of adaptive robots like Baxter that require just 25 minutes of training and cost $22,000, eliminating the need for prescriptive programming. Ismail highlights the continuous decrease in price to innovate, including the steadily decreasing cost of sequencing genomes, which will soon be cheaper than flushing a toilet. Ismail also mentions the emerging technology behind rewiring the brain with a light, which has great implications for neuroscience and biotech. Finally, Ismail discusses new animal product alternatives and the ethical implications of new technologies, particularly the need for educating the next generation of hackers and synthesizers on the moral implications of rewriting life forms.
00:15:00 In this section, Salim Ismail discusses the exponential growth of technology, specifically in regards to human microbiomes, CRISPR technology, and solar power. These advancements will have profound implications for healthcare, energy, and geopolitics. However, he warns that society is unprepared for the pace of change and that current structures and systems will need to be re-architected to adapt to the trillion sensors and increasing computational power.
00:20:00 In this section, Salim Ismail discusses the amygdala of society and how it is freaking out due to technology democratizing regulatory mechanisms, making top-down regulatory structures and legal frameworks to control society redundant. Salim mentions that we are seeing huge deflationary dynamics taking place when an industry is fully digitized from one end to the other, and that all of our intuition and training about the world is linear which makes it hard to predict the impact of exponential growth on different industries. He suggests that it is crucial to spot the exponential curve early since it can disrupt you very badly if you do not, and takes the example of how disruptive trading patterns like 3D printing and the growth of mobile phones cannot be predicted linearly.
00:25:00 In this section, the speaker discusses the exponential growth of businesses in the sharing economy, such as Airbnb, which has half a million rooms occupied in one night around the world and is on pace to become the world's biggest hotel chain by the end of the year, despite not owning any hotels. He also talks about the democratization of technology, which allows anyone to access and leverage new technologies and disrupt legacy industries with impunity. The speaker praises the blockchain as the most disruptive innovation he has ever seen, as it allows for decentralized authentication and dissolves systems such as banks and auditors. He warns that the pace of change is not slowing down and that 3 billion new minds will come online this decade, creating the biggest marketplace in the history of humanity.
00:30:00 In this section, Salim Ismail discusses the need to change the way businesses operate in order to adapt to a rapidly evolving digital landscape. He introduces the concept of exponential organizations, which are able to achieve at least a 10x performance improvement compared to their peers by using a new breed of organization structure. These organizations have a massive transformative purpose, tap into external resources, and manage their internal mechanisms in a decentralized manner. Ismail uses examples such as Valve Software, whose 400 employees work without a CEO or management structure, and TED, which created a global media brand through a cost-effective and community-driven approach.
00:35:00 In this section, Salim Ismail gives an example of a Chinese company that was making 55 million fridges a year, but realized that its corporate goals could not be met with its existing structure. The CEO transformed the company by turning 80,000 people into 2,000 autonomous teams that could vote on which fridge features would be incorporated, resulting in a significant increase in performance. Salim goes on to explain that by implementing just four out of the ten attributes of an exponential organization, the performance improvement is 10x. Existing companies that want to remain competitive in a rapidly changing world must update their leadership and open up to ecosystems, incubators, and entrepreneurs before taking disruptive change agents to the edge of the organization to build an exponential organization. Finally, Salim explains how dropping the cost of supply exponentially has caused the market cap to explode for companies like Uber and Airbnb, and encourages viewers to take the survey on his website to assess their own organizational scalability.
00:40:00 In this section, the speaker tells the story of Rob Reinhardt who wanted a meal in a shake and created Soylent, a meal replacement beverage that provides 100% of the daily nutrients needed for a human being, without the need for other food which has grown in popularity in recent years. Reinhardt open-sourced the formula, which had already spawned thousands of variants, and continues to update it with a software-like approach to version numbers. The speaker highlights that this development represents a fundamental inflection point because food, healthcare, and energy are now driven by software and information-based algorithms, which requires new approaches and systems to be developed.