The role of startups in the emerging paradigm

(Originally posted on raulotaolea.com)

The current socioeconomic model is reaching its limits [1]. It’s beginning to break down, causing collateral damage that none of us wants, but which increasingly affect us. The planet has reached the limit of the CO2 that it can handle, causing a greenhouse effect and global warming. We’re reaching the limit of inequality, with just 1% of the population holding 90% of the world’s wealth, causing massive migration from less developed countries. The speculative economy is also reaching its limits, representing 7500% of the real economy, and negatively affecting it. Technology is more focused on reducing the symptoms rather than finding sustainable solutions to the problems they’re generating. We citizens are reaching the limit of consumerism, confusing it with happiness and wealth, causing unhappiness, superficiality, depression, and other conditions. And, unfortunately, governments can’t do anything to rise to these challenges because they’re still held back by the model, unable to transcend it and to find new approaches. In summary, we need a new, sustainable model that solves the current socioeconomic model’s problems.

We need to expand our vision

But where to start dealing with such a challenge? Many authors turn to systems theory to get the broadest view possible of what’s happening. Following this line, if we assume that the planet is a system, understanding how it works from this new prism can provide new keys that will help us in building a new model. For that, briefly, it’s enough to know that all systems are made up of components that are dynamically related for a common purpose. These relationships between components make up structures that are what provide an order to that system in order for it to fulfill its purpose. On the other hand, there is a set of processes that define the behavior of the system and regulate its life cycle. What’s more, systems have the peculiarity that when they’re created, new properties emerge from their component parts, suggesting a synergetic relationship where the whole is more than the sum of the parts.

From a composition point of view, if we analyze the components that make up systems, we’ll see that they’re actually subsystems. Also, if we get even more abstract, we’ll perceive that our system is actually an element in a more complex system. Like a matryoshka doll set, if we examine any system, we’ll observe that it’s made up of its own subsystems that are in turn made up of even more subsystems. Therefore, we can go from the scale of the solar system down to the subatomic particles of a flower in your backyard garden, following all the relationships that join them together.

If we apply the system theory to the current socioeconomic model, we’ll quickly come to three realizations:

1. Everything is connected, meaning that every action in one system affects the other systems.
2. The relationships between components make up structures that give order to the system.
3. The systems provide more value than their individual components separately.

Our socioeconomic model is an ego-system

The main problem with the current socioeconomic model is that it does not take into account the impact of its actions on other systems, causing all those issues mentioned at the beginning. And who is responsible for this? Well, if we analyze it in terms of a system, we find that the components that make up the current socioeconomic model are people. And the structures that give order to the system are our relationship models. And what is the purpose of the system? What are the processes that define its behavior? Who defines them? In the current socioeconomic model, the processes are created by very small and well organized groups (lobbies), with their own interests, which they systematically impose on other groups that, due to their size and asymmetry, can’t effectively organize (citizens, consumers, etc.). This centralization of power ends up with a purpose that does not represent the common good, and, what’s worse, is generally unknown.

In this situation, in which we the people are not aware of the purpose of the systems nor the negative consequences it produces, we live in a kind of nebulous flow that takes us surreptitiously towards a destination we do not choose. In this progression, we do not make decisions consciously, but we inevitably make them unconsciously. Or, as happens in this case, the decision-maker is the collective unconsciousness, accepting what the model prescribes, which means following a route set out by the lobbies. The result is that this unconsciousness creates hidden dynamics that come to be materialized in reality as negative consequences, such as those mentioned before. The big problem that underlies this situation is that, since we’re not aware that we’re connected, we don’t think about the complexity of the relationships between systems or their impact. All this leads to a conclusion that has to be faced sooner or later, and that is that the people responsible for the negative consequences of the current socioeconomic model are the unconscious people. And if we don’t do something soon, the system will collapse in order to re-arrange itself once again.

The current alienating situation

But how did we get here? This is actually a normal situation in the process of social evolution. Experts say that social progress is the result of the interaction between the social challenges that arise and the solutions to them. When social powers can’t give creative responses to challenges, there is a replacement of structures, where new ones substitute the obsolete ones. These changes never happen gradually, but rather usually abruptly. That is to say, the system balances itself out when the common purpose does not represent the vast majority. And we are now in that precise moment, with challenges that the current socioeconomic model cannot solve, and wherein new structures are emerging.

The structures that need to be modernized, that is, the ways that we related to one another until now, are the fruit of several social evolution processes that are heavily marked by the industrial revolution. A clear example of that is education. Schools and universities are designed to produce people who respond to the needs of companies, rather than to the needs of society. That’s why there’s so much emphasis placed on learning scientific subjects to the detriment of the arts or humanities, where people who possess deep knowledge of one specific subject while having a limited view of society and relationships.

These people will then go into companies where the best will rise through the ranks to accumulate status and money, the symbols of success of this model. Those who are less well adapted to the companies’ demands will have to settle for dedicating a set number of hours a day to doing a job the management wants in exchange for a salary to live on. The companies themselves compete amongst themselves for shares in markets that quickly get saturated, without bearing in mind the collateral effects of this on the planet or on society. All of these attitudes have something in common: an egocentric viewpoint that prioritizes the benefit of the individual, or the company, forgetting the remaining components of the system. And this inertia will continue until the consequences of the model affect the most developed countries. While the secondary effects occur far away in space and time, we will continue on, immobile and unconscious, accepting the alienating and egocentric character of our modus vivendi as normal. That is, we’ll continue living in the nebulous flow.

A new vision: startups as change makers

So what’s the solution? The solution is a socioeconomic model with a systemic viewpoint, that bears in mind all the components of the system and their relationships. That is, how we relate with ourselves, with others, with the community we live in, and with the planet. Only by keeping everything in mind will we be able to transcend the current socioeconomic model, correcting the collateral effects and building a model that guarantees the common good and sustainability.

However, to build this new world, we have to wake up. We have to look up and be aware that we belong to a system in which we necessarily have to relate with one another, and collaborate with others to make the system sustainable. Unfortunately, this process only occurs in one of two ways: either people go through a life experience which forces them to look deep inside themselves, which almost always brings with it a complete reordering of values which then leads one to search for alternatives to the current model; or, they received an alternative-style education and/or possess a special sensibility and insight that allows them to perceive this new paradigm intuitively. The rest will only be mobilized when the first create a new model that makes the old one obsolete or the system collapses.

In this sense, many of us entrepreneurs want to create a culture that favors autonomy, evolution, and the purpose of the people who make up our startup. Nevertheless, if we’re able to widen our horizons, we can achieve so much more. We can participate in this change, and build a socioeconomic model that’s fairer and more sustainable. To get it, we must transcend the status quo and design a new company paradigm with a systemic viewpoint. If we do this, the startups we create today will be the organizations of the future, with projects specialized in different domains and oriented to the common good. Professionals will be conscious people who will choose these organizations according to their purpose and values, and they will get involved with them by collaborating and contributing value, while at the same time developing their skills and vocation. They will be sustainable systems, truly based on people who relate completely naturally with other systems to create synergies. Bur for that, we must first face the biggest challenge of them all, evolving the way we relate; that is, evolving the human race. And there is no doubt in my mind that this is the most disruptive innovation possible, because, in the end, it’s the one that leads to all the rest.

Notes

1. Authors Otto Scharmer and Katrin Kaufer describe in their book "Leading from emerging future", in great detail, what they call version 3.0 of the socioeconomic model. In this paragraph, I briefly highlight the most relevant points.