Published in the San Diego Union-Tribune, April 27, 2020
Like it or lump it. The derivation of this phrase appears to be dated in the 16th century and is sometimes credited to Thomas Hobson, famous for Hobson’s choice, loosely translated as “take what is here at the moment or walk away with nothing.”
And so we come to the puzzle for today — when the world presents challenges or opportunities in lumps, how do you best slice and dice them so that they can be managed and utilized effectively? For insight in this arena, I turned to Lee Anne Fennell, professor at the University of Chicago Law School.
Fennell frames the problem as “reconciling immediate preferences with long-range aspirations.” For example, I want to go to the beach, even though it is closed because of this damn virus vs. I also would prefer to not get sick and stay healthy.
She says that the world comes in lumps and the key is to “assemble right-sized resources or effort” in order to get to the goal. She calls this “engineering the slices.” Think about buying a whole pizza. You are not hungry enough to eat the whole thing, and the whole pizza is beyond your budget. One slice would be perfect, and you could afford it. Unfortunately, this restaurant does not sell by the slice.
And there you have it. All kinds of opportunities come in lumps. One solution here might be to have two or three friends who are hungry, but your friends need to be able to pay their share of the cost. If not, then maybe you need new friends.
In the startup world, this kind of decision-making happens every day. How to scale the product or innovation, and what are the small steps, when aggregated in the proper order, that will get you to the complete solution.
One of Fennell’s examples is a half-finished house. It has no utility until it is complete. And if you run out of money before it can be lived in, then it is unlikely that you can fully recover what you have already spent. It leans toward being a zero-sum game; it is either a house or it is a pile of lumber and some plumbing supplies.
Startups often want to believe that “worst case, we can always sell the intellectual property and get our money back.” Nope. Like the house, the pieces are worth much less than the whole, even more so without the general contractor. Now consider a solution. What if we built a smaller house? Even better, what if we built a small house that could be added onto at a later date?
This kind of thinking is going to be important as the country starts to come out of the anticipated recession (no reason to kid ourselves here). There will be resources delivered in lumps (money and customers), and they will have to be managed in slices. Your tax refund check comes in one lump, and you need to put it into 12 envelopes until the next lump arrives.
By the same token, you cannot just reopen a restaurant or a convention center by simply flipping a switch. The re-startup costs (the needed lump) do not arrive in neatly arranged slices. How to manage the re-entry into the world as we once knew it is going to be a challenge for all of us.
Change will be dynamic. No operating manual with instructions in 12 languages. Assembly is required. It will be IKEA on steroids, bring your own screwdriver. And the business of buying and selling is not going to be predictable. The mask/ventilator folks are different than the solar roof installers.
But I think one thing has changed for the greatest good. The vibe in our community seems different. Everyone appears a tiny bit nicer, maybe because they are terrified, but maybe because they see the goal and recognize that the way to get there (and stay there) is to make smaller slices and to work together. Decisions seem smaller (you really don’t need 238 rolls of toilet paper), and I sense that we are parsing our behavior in more temperate ways.
When confronted with mortality whether in your startup or in your life, we are very much inclined to gratefully focus on the smallest slice before us.
Senturia, a serial entrepreneur who invests in early-stage technology companies, writes weekly about entrepreneurship in San Diego. Please email ideas to [email protected].
Rule No. 654
OK, but hold the anchovies.