The Business White Holes
We are all drawn to brilliant business leaders and titans. From Jobs to Bezos to Musk, these moguls revolutionized their industries and created fervent zealots around their products and services. They shine as "white holes" in a dark endless space of pedestrian businesses.
If you're not familiar with the term, "white hole," it's the reverse of a "black hole." In order to enter a white hole, you must first move through a black hole, which may be intimating as the space around you seems foreboding and the gravitational forces may even be collapsing upon you. As you push further though a black hole, you enter a state of "spaghettification" or the "noodle effect," where mass is stretched and torn apart before it is ultimately pushed through the end and exits through a white hole.
In layman's terms, starting a business is the same as entering a black hole. You're leaving your regular orbit and entering a new trajectory with a long-term goal of becoming a white hole unicorn or reaching a billion+ dollar market cap. As you move through your black hole, the pressures of competition, product market fit and scaling may all seem daunting and crushing. The fact that approximately 20% of small businesses fail within their first year and only 33% survive to year ten, illustrates how demanding and crushing these forces may be to any future aspiring business white hole leader.
As you push further through your black hole and start to grow, your business experiences "spaghettification," as traction starts to exponentially scale within your industry. However as you scale, it's imperative to make the right decisions with adding new hires, developing additional products, raising new capital, improving your customer lifetime value, while reducing your cost per customer acquisition.
If you're able to move through this noodle effect and stretch your business to a new orbit, you will eventually enter and become a white hole. White holes are the industry leaders and unicorns that continue to scale endlessly and reach higher and higher valuations. These are the industry leaders that we all revere in an endless space of business competition. Think Apple, Tesla, Amazon, Facebook, Netflix, Google and SpaceX to name just a few.
As you're growing your business or investing in a new business, ask yourself what state is it in? ...Is it just leaving orbit? ..Is it pushing through its black hole? ...Is it about to become crushed within the black hole? ...Has it started its state of spaghettification where valuations start to 5, 10 or 20x each valuation round? ...Or is it already a white hole?
The more we can identify where our businesses and investments lie within the space of business, the more we are aware of the opportunities to maximize our investments, capture additional value or minimize the risk of failure.