Building a universal mental model through abstraction and applying it to the startup lifecycle.

As someone that is voraciously curious, I've always wanted to create a system for understanding any topic. How can I methodologically break down any subject to deepen my understanding? The answer I've found is abstraction and connection between concepts.

There are certain units that I like to try to break a topic down to. The most common ones I see are information, energy, currency, utility, space, time, and thought. Most topics in science and technology are related to the manipulation and distribution of these units.

In this article, I try to explain my reasoning on the startup ecosystem. Ideating, researching, designing, developing, marketing, and selling technology-based products.

Information

Since most startups are based around software and information technology I think it’s important to draw some distinctions within the scope of information.

• Data is the base unit of information that is collected from an environment.
• Intelligence is the information needed to make decisions that maximize leverage or the value of information.

Research

One of the largest problems I faced in my first attempt at building a software product was that I ran into the market blind. I didn’t know if there would be customers or how to find the target audience. Research is the process of collecting information and generating intelligence. Market research can give insight into a market's competitors, size, demographics which all influence the intention of the product design. How will the product be differentiated from competitors and find an appropriate target market? Research is answering the question: what information is needed to design a product?

Design

Design is the process of planning the development of a product in order to maximize the utility for the targeted audience of users. I think it’s important to leverage the previous research in order to empathize with the target audience. What pain points are the product solving for the customer and how does the design address them.

Software development

Software is primarily the manipulation of information or data. Like a physical machine using power to perform an action, software uses algorithms to perform manipulations of data. Front-end development is centered around displaying and taking input of data from a user. Just as a simple machine generates mechanical advantage, the software should generate leverage for the user. Front-end development is building the interface in which data is input and output in accordance with the design. Back-end development is the storage and manipulation of that data. I like to think of the entire stack as an I/O function. The front-end is really the parameters and the return statement of the function and the back-end is the contents of the function.

Marketing

Since marketing is the process of delivering value to a market, the obvious base unit is currency. There are many metrics in marketing that could be used as a base unit of currency. I think in general, engagement with a brand and product is the most widely applicable metric for determining the effectiveness of marketing. This currency is like an illiquid asset that has to be liquidated into revenue through the sales process.

Marketing channels could be seen as a data sink for delivering information that then outputs this marketing currency. The information or content delivered as input is important but the function of the channel is also important. The function is primarily determined by the audience reached.

Sales

From the engagement generated by the marketing process, the sales process converts this engagement into revenue. This is what’s called conversion and can be measured by the conversion rate of engagement to revenue in web sales or the close rate of deals in a sales team. Improving things like the landing page and sales funnel can be used to optimize this conversion. The sales process can be highly influenced by the utility that the product generates for the customer. If the retention rates and churn rates are high, it’s likely a sign to optimize for product utility over conversions.

Conclusion

Breaking down complex systems into more abstract elements can help develop an intuition for how to iterate as a founder. It can help address the root problems and what the bottlenecks are. I’m still very young and new to this world of indie hacking but wanted to write out and share my thoughts about what I’ve learned so far. If you enjoyed it, I’d appreciate you sharing it or following me on Twitter and I’d also love to hear feedback.