Via negativa
Entropy-reversal
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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.
Business are entropy-reversal machines
The same law governs companies: every extra distraction, whether an unneeded product line, department, or offer, wastes energy as coordination overhead. The most successful businesses reduce the number of variables to optimize, and route value along the shortest path from technical knowledge to the customer.
For instance, luxury brands reduce entropy locally. Instead of laboriously “becoming” refined, you buy a status item and signal refinement in one move. Instead of spending years cultivating pedigree, you flash a Rolex or pop a bottle of Hennessy and broadcast refinement in seconds. In the past you needed lineage, club memberships, and the right circles; now a Balenciaga hoodie can fake the signal. Of course, this is cosmetic polish. The truly wealthy keep raising the bar—new gatekeepers, new subtler cues—so the mass market keeps chasing yesterday’s status symbols, but that’s another story.
Another great example of entropy-reversal machine is Shazam. It turns a noisy fragment of music into a single line of text : its title. You no longer waste energy hunting for the song. You don’t need to ask DJs or spend hours looking for lyrics you vaguely remember online. Shazam reduces entropy; it lowers disorder and saves you unnecessary hassle.
Then, focusing your company is a fight against decay. Think of your product like a pile of bricks: stack them into a straight, mortar-bound wall and each brick reinforces the next, so you can keep building upward. Throw the same bricks randomly across a vacant lot and they trip you up, erode in the weather, and support nothing. In one case, you reverse entropy, in the other one, you catalyse it. A clean architecture is like a straight wall: a structure that lets you add each new “brick” without it getting lost in the debris.
Legacy actors, burdened by layers of bureaucracy, are high-entropy corners. Start-ups win by removing intermediaries, paperwork, and wait time.
Schumpeter called this the “process of creative destruction” where the old system is destroyed and a new one is created. It is the foundation of Capitalism.
The essential point to grasp is that in dealing with capitalism we are dealing with an evolutionary process … Capitalism, then, is by nature a form or method of economic change and not only never is but never can be stationary … The fundamental new impulse that sets and keeps the capitalist engine in motion comes from the new consumers’ goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates … the same process of industrial mutation …
This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in …
Through this process, the most innovative businesses—able to do more with less energy loss—replace high-entropy firms that scatter their bricks and cripple their own compounding. These successful companies set the new baseline until a fresh competitor inserts itself into the cracks. When a dominant business fails to keep reversing entropy, it leaves room for smaller players to enter, just as it is easier to penetrate a liquid than to pass through a stone. In my opinion, this is the bridge between Schumpeter’s creative destruction and local entropy reduction.
Take B2C clothing: fast fashion has converged on the Zara model after Ortega noticed luxury brands were slow and bloated. Zara essentially squeezed time-to-shelf and keeps reversing entropy. In everyday finance, neebanks such as Revolut and Nubank removed branches, paperwork, and waiting lines, slashing coordination costs and forcing traditional banks to adapt.
Each time, a dominant actor establishes a temporary lower-entropy equilibrium—until it becomes bloated, and a new wave of creative destruction begins.
A system always carries within it what can destroy it. A company that once reversed entropy so well can grow so large that it becomes immovable. Its mounting inertia and energy-wasting processes rise at faster pace than its ability to direct innovation. Eventually the drag overtakes the drive, and the very scale that once protected it turns into the force that destroys it. They lose their ability to remove and instead keep adding more energy-losing components, usually in the form of MBAs and McKinsey consultants2.
Via negativa
As explained earlier, breakthroughs usually come from subtraction. Science advances by discarding false hypotheses, not by piling on more assumptions; its strength is the power to be proven wrong and discarded. Its daughter, technology, progresses by removing friction, intermediaries, and wasted energy. Any innovative entity should embrace via negativa: ask what can be eliminated to let value flow with less resistance.
Consider Dyson, which removed the vacuum-cleaner bag; Apple, which removed buttons; and Tesla, which stripped almost everything from the car. When creating your company, ask: what are you not, and what do you dislike about existing solutions? Saying they are slow or bureaucratic is incomplete. How did they become that way? What can you undo for customers, and what can you delete from your product?
For example, many firms insist on a call for every purchase. Fuck no, you do not need that. Why can’t customers just click to buy and self-onboard? SaaS leaders removed that friction; one-click onboarding became the standard. Processes change dynamically. There are opportunities for via-negativa wherever twisted incentives rule, where middlemen manage fear and charge for hassle instead of value. Accountants, for instance, resist automation to protect their certificates and keep work looking complicated.
Ask which gaps in empathy or excesses of comfort have led market leaders to ignore what clients want. Banks did this and neobanks filled the void.
What innovation can you pursue that will take slow actors decades or that they will never even try because no one cares? Which data or leverage do they ignore? Today, AI is that leverage. Knowing these questions and their answers, invert. Build by removing. Why can you be what they are not? Why will you avoid becoming what they already are?
What are you not? What do you refuse to inherit from them? Which wrong hypotheses or twisted incentives shaped them?
Let your differentiator rise from those differences. Begin with removal, and let simplicity speak louder than addition.
That’s why a gas or a liquid carries so much entropy. Picture trillions of tiny particles free to wander almost anywhere they please; shuffle them endlessly and the glass of water or the puff of air still looks the same to us. By contrast, imagine a diamond. Its atoms lock into an exact configuration; nudge one out of place and the crystal is no longer the same. So the stone sits at the low-entropy end, the liquid in the middle, and the gas soars highest.
Automation may solve that, and we may see real super-power companies; Amazon could be the first because it is giant yet still flexible in its use of technology. That is the power of leverage, though it is not today’s topic.