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Dissatisfaction
If you want to create a business, you are usually dissatisfied with what the market is offering. Few entrepreneurs believe everything is perfect before they arrive. You don’t open a shop selling commoditised products unless you want an undifferentiated business. That would be a terrible move, and you wouldn’t be reading this article.
Differentiation drives a successful company, and differentiation grows out of dissatisfaction with the status quo. That is the beauty of business and innovation: nothing is fixed, the status-quo exists only in our minds.
A common mistake most people do when thinking about innovation is to focus on what they can add. On the contrary, the best innovations usually remove existing components. Improving existing products usually comes more from taking things away rather than from adding new features. The best example is the iPhone. Steve Jobs removed … well, everything.
I love exploring multiple disciplines when it comes to understanding businesses because they shape the world more than any institution, even governments. Therefore, a broad knowledge of the world is essential to understand them. Let me get to my point.
When entrepreneurs shamble a market, just as important as the reward of a new product is the removal of the old one. In fact, almost every industry converges to a standard, and that standard is dynamically set by whichever solution wins at a given time. In the process, an infinity of incomplete or unsustainable solutions die. This is Darwinism and survival of the fittest, but for products. When this takes place and a business concentrates solely on a single objective to survive, something fundamental happens: they reduce the entropy in their local network.
Technology locally reverse entropy
Entropy is a fundamental concept in physics, a quantitative measure of disorder (or the number of micro-states compatible with a macro-state)1. The Second Law of Thermodynamics states that in any isolated system—including the universe as a whole—total entropy cannot decrease and, on average, keeps increasing. Over cosmic timescales, this drives everything toward maximum disorder, the “heat-death” state where no useful energy remains and we all turn into cosmic dust. We spend our lifetime fighting against this,
As investor-philosopher Naval Ravikant puts it,
“Humans locally reverse entropy”
Basically, in physics, the arrow of time comes from entropy. The second law of thermodynamics states entropy only goes up, which means disorder in the Universe only goes up, which means concentrated free energy only goes down. If you look at living things (humans, plants, civilizations, what have you) these systems are locally reversing entropy (Almanack of Naval Ravikant)”
A telephone switchboard once needed armies of operators; a WhatsApp ping now crosses oceans in a blink, showing how every barrier we erase—distance, latency, intermediaries—lowers local entropy and frees surplus energy.
Similarly, traditional payments move through a long list of relays. You swipe a card, the merchant’s bank pings the card network, that network routes the request to your bank, each side reconciles overnight, and settlement finally clears through a central bank. Every extra stop adds virtual paperwork, fees, and points of failure. We can call it monetary entropy, the spread of effort and information across many systems for a single transaction.
On the contrary, peer-to-peer networks and modern cryptocurrency protocols collapse the transaction chain to its bare minimum: two counterparties and an open-source protocol. No banks, no clearinghouses, no paperwork. Each transfer settles on a shared ledger everyone can verify, yet no one controls. Zero-knowledge proofs go further in reversing the entropy. They let you prove you’re allowed to enter a transaction without exposing any other data. The result is maximum entropy reduction: fewer actors, fewer hand-offs, and the least information leaked per exchange. Those technologies are not mature yet and have attracted many scammers in the last few years, but they answer a fundamental question toward entropy reversal.
Of course, the Internet itself may be the ultimate expression of this pattern, a low-entropy mesh upon which we keep layering value. It is likely our first terminal technology, a base layer so universal that every new tool plugs into it instead of starting from scratch. Its neutral TCP/IP stack lets any device talk to any other without special gateways, collapsing communication entropy. Each new wave, web, mobile, cloud, crypto, AI, simply adds a layer, reinforcing the network’s value and making replacement practically impossible. My bet is we’ll keep stacking innovations on the internet to the very end of our civilisation.
The computer industry also shows the entropy-reversal idea perfectly. Internally it is staggeringly complex, yet you turn it on with a single button. Engineers sealed customer-facing entropy behind automated boot scripts; that encapsulation let laptops scale to millions of users. Today's laptops allow you to accomplish more with less effort.
Good businesses do the same. They encapsulate complexity so customers enjoy effortless experience.
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