Diagnosing Runaway Selection
Diagnosing Runaway Selection - strategic framework from The Biology of Business.
A diagnostic framework to determine whether business success comes from runaway selection (arbitrary culturally-transmitted preferences) versus honest quality signaling, which matters because runaway dynamics are inherently fragile.
When to Use Diagnosing Runaway Selection
Use when uncertain whether your premium comes from real quality or arbitrary preference, when evaluating competitive moat sustainability, or when market preferences seem to be shifting.
How to Apply
Preference Arbitrariness Test
Remove all brand markers from your product. Put it next to competitors in blind test. Do customers still prefer yours? Do they pay premium?
Questions to Ask
- Remove brand markers → does product command premium?
- Blind testing → do customers prefer your product?
- If no to both = arbitrary preference
Cultural Inheritance Check
Examine how customers learn preference for your product. Direct experience suggests honest signaling; social learning suggests runaway risk.
Questions to Ask
- How do customers learn preference? (Direct experience vs. social learning)
- What happens if cultural transmission interrupts?
- Strong cultural inheritance = runaway risk
Feedback Loop Measurement
Identify whether self-reinforcing dynamics are active.
Questions to Ask
- Does scarcity increase desirability?
- Does desirability increase scarcity?
- Does social display of product increase others' preference?
- All yes = runaway amplification active
Stability Assessment
Evaluate vulnerability to preference shift.
Questions to Ask
- What percentage of value comes from brand vs. product?
- How quickly could competitor substitute if preference shifted?
- What's your defensibility if arbitrary preference changes?