Heuristics
Popular business rules of thumb - and the deeper biological truths they simplify
Rules like the "80/20 Principle" and "Rule of 72" are useful shortcuts. But they're crude approximations of deeper patterns that biology has refined over billions of years. Understanding what these heuristics actually represent - and when they break down - turns surface-level advice into genuine insight.
Growth
Rule of 72
"Divide 72 by the growth rate to find how long it takes to double"
The Rule of 72 is accurate math applied to a false premise. The doubling calculation is correct; the assumption that exponential growth continues is not.
Finance & BankingS-Curve (Technology Adoption Curve)
"New technologies follow an S-curve: slow start, rapid growth, then plateau"
The S-curve isn't a business pattern - it's a mathematical property of any growth process that compounds and has limits. Understanding this helps you see that slowing growth isn't failure; it's physics.
Everett Rogers' Diffusion of Innovations (1962)Network Effects
"A product becomes more valuable as more people use it"
Network effects are positive feedback loops, and biology shows that all positive feedback loops eventually encounter negative feedback. The question isn't whether you have network effects - it's whether you can sustain the positive loop and prevent the negative one.
Robert Metcalfe (Metcalfe's Law) and economics literatureCompound Interest
"Einstein called it the eighth wonder of the world - money making money on money"
Compound interest is real math applied to idealized conditions. The actual insight from biology is: compound aggressively in stable conditions, but maintain reserves and optionality for when conditions change - because they will.
Ancient (known to Babylonians), popularized by Benjamin Franklin and othersFlywheel Effect
"Success builds on success - each turn of the flywheel makes the next turn easier until momentum becomes self-sustaining"
Flywheels are real, but they're not perpetual motion machines. Every positive feedback loop coexists with negative feedback that eventually dominates. The strategic question is: what could reverse your flywheel, and how do you prevent it?
Jim Collins' Good to Great (2001)Distribution
Organization
Dunbar's Number
"Humans can maintain about 150 stable relationships"
Dunbar's number isn't a limit to accept - it's a constraint to design around. Biology shows many solutions: hierarchy, modularity, specialized communication channels, and distributed decision-making.
Robin Dunbar's research correlating primate neocortex size with social group size (1992)Two-Pizza Rule
"If a team can't be fed with two pizzas, it's too big"
Two-pizza teams work not because small is always better, but because they sit at the sweet spot where coordination costs haven't yet overwhelmed productivity. The real question is how to structure larger organizations as networks of two-pizza teams with minimal interface friction.
Jeff Bezos at AmazonCompetition
First-Mover Advantage
"The first company to enter a market wins"
The question isn't 'should I move first?' but 'what kind of ecosystem am I entering?' In immature, rapidly evolving markets, being a fast follower often beats being a pioneer. In markets with network effects and lock-in, first-mover advantage can be decisive.
Business strategy literature (1980s-90s)Moat (Economic Moat)
"Build a defensible competitive advantage that protects your business"
Moats are not permanent fortifications - they're current niche advantages that persist only while the environment remains stable. The better question isn't 'how wide is my moat?' but 'what would have to change for my moat to become irrelevant?'
Warren Buffett (popularized the castle-and-moat metaphor)Innovator's Dilemma
"Successful companies fail because they do everything right - listening to customers and improving existing products - while disruptors attack from below"
The innovator's dilemma is evolutionary specialization applied to business. The solution isn't to avoid specialization - it's to maintain enough organizational genetic diversity to survive niche shifts.
Clayton Christensen's book (1997)