COBURN VENTURES
AGENDA 2024: ROGUE WAVES
LENSES
“Our job is to get positioned under the apple tree as Newton did in order to get systematically bonked on the head with highly relevant practical investment insights (uncommon understandings)…”
Agenda 2024: ROGUE WAVES
ROGUE WAVES
A couple of years ago, we started using the expression “Rogue Waves” and then “Rogue Waves Crashing Into Rogue Waves”. What this means is that the human experience will move further and further away from the prior orientation of “stability” and “certainty” that we, humans, tend to crave. We are not moving toward a new “equilibrium”. Things won’t feel “settled down”. This will be extremely challenging for our species. We even have systems in place that structurally make the challenging condition worse. In ways, it will get messier at the societal, organizational, marketplace, and individual levels.
This “uncertainty” also directly results in opportunity!
“Uncertainty” = “Increased Change”
“Change and Investing are synonymous…”…Eldon Mayer
Inherently, Rogue Waves are neither bad nor good. If you, specifically, cherish status quo, Rogue Waves are no doubt bad. The human species – while we dislike “uncertainty” -- is also drawn toward “advancement” unlike no other species. What a paradox. What a moment!
Rogue Waves aren’t specifically predictable but we can understand their patterns. As a first step in understanding the patterns, we find it critical to consider what is systematically sourcing them.
ROGUE WAVES: FOUR UNDERLYING SOURCES
Historical patterns can help.
There have been many revolutions.
This is not the first time we have experienced “ripples” generated from a specific revolutionary source. But perhaps the phenomenally jarring distinctions today are (1) the chain-link-lightning-speed of the change paired with (2) the mammoth size of “Rogue Waves” as compared to relatively more gentle “ripples” and (3) the incredible number of “Rogue Wave” changes. Rogue Waves are normalized. “Tail Risk” events are no longer “tail risk” when they become so numerous as to move to the center of the distribution.
Rogue Waves are frequent, they are in your face in an instant and they demand a response. They can’t be ignored.
Even with this heightened intensity, we can nevertheless, study patterns from the past which themselves grew faster and larger than their predecessors. The industrial revolution, the transportation revolution, the communication revolution, the computing revolution all brought forth decades if not centuries of “ripples”.
What current “revolutions” are causing Rogue Waves?
FOUR SOURCES OF ROGUE WAVES:
#1 The Quantum Change in Connectivity.
#2 The Quantum Change in Access to Information.
#3 The Fears and Realities of Climate Change.
#4 The Mainstream Study of the Mind.
In complex systems, when you see revolutionary shifts in fundamental elements the system becomes far less stable. All four of these elements are fundamental in the human condition. All four of these revolutionary sources are still in what will seem like initial stages of impact when we look back 50 years from now. Two of the four -- “Climate Change” and “The Study of the Mind” -- have barely gotten going.
These are the four revolutionary sources of “Rogue Wave” change we define, describe, and organize around.
“The task is not so much to see what no one has yet seen, but to think what nobody yet has thought about that which everybody sees…”
…Arthur Schopenhauer
FRAMING ROGUE WAVES LENSES
A PRACTICAL MEANS FOR COPING WITH THE WORLD’S “TOO MUCHNESS”
The four sources of Rogue Waves are helpful for understanding the ongoing power and frequency and nature of Rogue Waves ahead, but we can also add in a complementary set of tools that might allow us to see much more.
We call such tools “lenses”.
Lenses might be considered a key antidote to our individually developed worldviews. They can be used as our partners in collaboration. It is widely accepted that our individual worldviews are extraordinarily limited. Extraordinarily limited. In practical terms, this would mean that based on our own worldview we might be limited to only being able to explain some small small amount of what unfolds in human society.
We might like to THINK that “our thinking” explains most everything and it's just the other people that “don’t get it”!!! Indeed, if our worldview explained 80%+ of what happened in the world maybe we don’t need any extra tools! 80% would be pretty powerful. Instead, I suspect maybe our worldviews tend to explain, well maybe, under 10% of what happens. So maybe step one is to “admit” that the worldview I grew up into is extraordinarily limited. If I truly want to understand the world far more, I will want to develop a student-minded orientation and seek some specific expanding methods to “see”. Lenses can be a key part of your method.
While there is no lens that reveals “the” singular truth or predicts the future perfectly, lenses can help us see more.
IRWIN’S LENS ON LENSES
“Our approach of using a variety of lenses to make sense of things is so aligned with contemporary epistemological and psychological approaches. One of the most important psychoanalysts in the world - Michael Eigen who is in his late 80's and still a heretic - teaches that there is a ‘too muchness’ to reality. So, we human beings create LENSES, theories, frameworks, ideologies, theses, that filter, limit, and curate reality to enable us to actually make sense, create some sort of order of, and ‘see’ what’s happening. There is no alternative to having a lens and, in fact, fashioning a lens is one of the necessary, creative, and even noble things we do. The key to a flourishing life may be in part a function of how many lenses we can use. The more lenses the better. Our five lenses aren’t in any way exhaustive, but they will enable a deeper read of what’s happening in our economy, culture, and society…”
…Irwin Kula
PIP ADD: The danger in lenses isn’t so much having too many of them, though that could be hard to manage and integrate. The serious threat is adopting ONE SPECIFIC LENS and soon believing that this ONE SPECIFIC lens has such exceptional power that it explains all and other worldviews and lenses and the people who use them can be ignored. This danger is consistent with “fundamentalism”. I once heard fundamentalism practically defined as “I have to have things MY way” including how everyone boils down how they look at the world.
SO WHAT ???
AGENDA 2024: FIVE FOCUS ROGUE WAVES LENSES
We have decided upon FIVE LENSES we will use over and over during the next 24 months. As a collection, they are not fully sufficient. But maybe instead of being throttled to a mere 8% explanatory power of my dominant worldview, I can see much much more. We selected these five in part because they provide uncorrelated views of the world though at times they can’t help to overlap with one another.
These are NOT the only lenses! We selected these from 20-30 that we often employ. You may prefer other ones! We encourage it! All else equal, this will be a period ahead when systems that can effectively include more lenses will have an extraordinary advantage.
OUR FIVE FOCUS LENSES FOR 2024
#1 The Simultaneous Clash and Integration of Civilization:
A theory from Samuel Huntington in the 1990s explored the potential for extremely combustible clashes among civilizations around the globe. We are using that theory as a starting point but adding that (1) integration seems to be accelerating perhaps even faster than clashing, which alters the practical outcomes from this shift and (2) this “clash” is not merely happening at a nation-state or religious level that Huntington focused on, but it is happening at a dozen distinct vital levels-- even at the individual level. We will explore widely.
#2 Naked Without Data 2024:
We are at the cusp of digital transformation, artificial intelligence, and the “Red Herring Challenge”. In 2006, we crafted what we call the Data Chain which many of you know well. We also started speaking of the pressure to avoid being Naked Without Data. “Data” had grown to be a key element of the zeitgeist: leaders were expected to have it to support all thinking at every turn. But we were also infantile in our understanding of data. In an absolute societal sense, we still are infantile, but the pace of learning is swift. Our data acumen is rising. We are digitally transforming, with generative AI developing to be a real and jarring next step. At the same time, we will start pushing back on “stupid data” – this is data that clearly leads us away from the real objective. Previously “we” were unable to push back. This is what we call the “Challenge to the Red Herring”.
#3 The Market Opportunity in Solving Loneliness:
We consider that the mismatch between (1) the Quantum Change in Connectivity versus (2) the lack of increase in quality of relationships significantly accelerates an already high degree of loneliness. We think of “connectivity” as a matter of physics. We ARE massively more connected, but in a physics sense. We think of “relationship”, however, as a spiritual factor. What we have today is that we are overwhelmed by the first (physics) to the extent we can’t process the physics and yet the “spiritual” is falling at the same time. Psychologists would suggest that loneliness equals the lack of spiritual relationship. Prior “revolutions” had already done substantive damage: (1) the “Media” revolutions present a ceaseless and inexorable net grinding down of community; (2) There is a normalization of vast emotional distance in business. There are several responses: (1) products/services that look to further increase “connectivity” and exacerbate the loneliness problem; (2) coping mechanism products/services such as medication and more media; (3) pop-up community moments such as live concerts; (4) deeper communities that provide basic grounding for individuals to build from.
#4 The Zeitgeist Shift: What We Expect from Business and Beyond:
More power is now in the end nodes of the economy. The smartphone has been drastically reducing centralized power and will continue to do so at an accelerating pace. This is happening against a growing backdrop we call “The Bias Against Big”. The power dynamics are shifting quickly. The zeitgeist is shifting. Some deeply centralized companies will aim to hang on to their well-developed moats. Some industries may have the luxury of responding merely with effective PR but little substantive adaptation. Some new entrants will exhibit perfect alignment with this new zeitgeist. Across a longer time frame of t=n, every business will be drastically impacted. Meanwhile, businesses that were run with investors as the SINGLE-FOCUS stakeholder will be forced to make room for multi-stakeholder capitalism.
#5 Hyper-Personalization – meets – Pursuing a Special Life:
Across the past several decades, the social and economic penalties for having what you really want have dropped significantly. Yesterday’s penalties have been dropping and hyper-personalization is construed as (1) manifesting identity and (2) self-expression. Many in the prior generations may think this hyper-personalization has all gone way too far but our observation is that this trend is only just beginning. One facet of hyper-personalization of life is the constant pursuit of a “special life” that is considered as an external experience of products and experiences.
FIRST ALTERNATE: The Meaning of Life is to be Entertained 😉:
If aliens landed on our planet and observed us for just a month, they might likely conclude that our species considers that the meaning of life is to be entertained. When we first made this suggestion 15 years ago, we made sure to communicate that we were speaking tongue-in-cheek and that WE, specifically, didn’t believe this to be true, but today the evidence grows even greater that “entertainment” (diversion) is where the action is! As such, businesses of every variety are not only aiming to sell more “entertainment” in their offerings but are building entertainment into every nook and cranny of operations. The idea of “gamification” of work ? A manipulative method to make work tolerable and to compete against on-the-job smartphone use.
“That’s because our habitual way of seeing things gets in the way… We create our own mental Maginot Lines all the time without noticing…”
…Phakchok Rinpoche
AGENDA 2024: FIVE PROCESS FOCUS ZONES
We have been steadily increasing the amount of “process work” in what we provided for clients. At our inception in 2005, perhaps 20% of our work involved “process”. Ten years later that percent had grown perhaps to 50% and today it might be 70%. 70% internal change work, 30% external forecasting work. I have loved the opportunity through “process work” to pursue annuity differences. I see every change as an enhancement to “alpha” forevermore while the effect of our individual stock work – which I dearly loved and clients would likely say was highly distinctive -- was more limited so much so that we discontinued individual stock work altogether five years ago.
I also found that if a client wanted to really talk process, they had few places to turn. We have a meaningful opportunity to attend to this gap. The breadth of our “process work” is quite vast. Very few topics across all these years have simply stumped us. If you are deeply wrestling with a process challenge we have probably been wrestling with it for a long time and have perhaps made significant headway across the years.
To organize ourselves, we have chosen to specifically focus on five process zones for the year for 2024. Here they are:
OUR FIVE FOCUS PROCESS ZONES FOR 2024
#1 Decision Making (Subplot: Market Psychology)
#2 The Input Revolution (Subplot: Overcoming Media)
#3 Engineering Seeing More (Subplot: Question Asking)
#4 Complex Systems (Subplot: Practical Real-World Change)
#5 Converting Knowledge into Insight (Subplot: Change Frameworks)
FIRST ALTERNATE: Time Management (Subplot: Clean Time)
“Whatever we see, we think it is seen through the eyes, but actually it is seen through the power of unobstructed, stainless awareness mind”
… Thinley Norbu Rinpoche