I studied Chaos Theory for a semester when I was in college

As a physics student, creating a framework to understand chaos was fascinating. Even more fascinating to learn was that chaos appears random, but it isn’t. It is highly sensitive to initial conditions but does have patterns emerge. 

Lorenz, a legendary mathematician and meteorologist, showed us that chaos could be deterministic. They could even create synchronization and patterns. 

The key to identifying whether a system is chaotic is to see its sensitivity to original conditions. 

We are very deep in chaos today

Having been struck by a once in a century pandemic, chaotic scenes emerged. Soon, the virus started to get slightly predictable. Chaotically predictable. We felt like we could get back to our lives.

Then the war happened. Inflation happened. Interest rates happened. 

The last 3 months seem almost as chaotic as the harrowing few months of 2021 and 2020. One would wonder if there would be an emergent pattern to tell us how chaos would ensue.

I think we’ve learnt for life that the starting point can change the expected evolution of a chaotic system. 

What if the virus hadn’t hopped from a bat in China but in a lesser connected country? The sensitivity of the system to the original condition is so large that it is inherently impossible to predict. 

I truly believe markets in big resets are chaotic systems too.

What we saw in crypto is the outcome of a chaotic system. One short sell triggered the collapse of Luna’s ecosystem by 99%. 

https://twitter.com/aviralbhat/status/1524693955237261313

The death of a chaotic ecosystem also creates a chaotic ecosystem. In the destruction of certain ecosystems, I believe there are shoots for new systems

The implication is that chaos is the best time to a start a new company. 

If your company is part of the initial starting condition of the ecosystem, it could be a game changer. In times of chaos, rules are reset and older companies are usually flat footed. 

Large organizations are almost always unable to handle chaotic ecosystems. 

In their inability to respond, startups can take the lead. The gaps created by them are an opportunity. Many ecosystem participants, founders and investors alike, are unwilling to jump in till the “dust settles”

That is the time to get in

Don’t look at chaos as a deterrent. The lack of competition is a window of opportunity. Big companies are struggling. 

Leverage the chaos and ride with it.