Fascination with Seeds vs. Fruits

Seeds grow eventually into fruits.

Fruits bear seeds, but could also be enjoyed on their own. Which is the common metaphor. Fruits are results. Seeds need effort, right conditions and, most importantly, time.

What are you focusing your scarce attention on? Fruits or seeds.

Don't judge each day by the harvest you reap, but by the seed you plant.
Robert Louis Stevenson

Evaluating Potential

Garry Tan from YC, as well as others in similar positions, often speaks about picking winners. Winners, and humans in general, are a bit more complex than seeds and fruits, but the metaphor holds true at any stage of growth. All winners have a bag of failures.

As fruits are an end result, winners could hit a dead-end.

Would it not be optimal to find winners just before they hit it big?

Seeds, "future-fruits", are on a growth trajectory.

Future winners, sometimes find themselves on a similar trajectory. A winning trajectory is like a seed's optimal growth conditions:

Upward progress (like a seedling breaking through soil)
Accelerating rate of improvement (similar to exponential plant growth phases)
Accumulating advantages (nutrients in the soil building up)
Positive feedback loops (stronger roots enabling better nutrient absorption)
Resilience to setbacks (well-rooted plants surviving storms)

Just as a healthy seedling shows early signs of growth, individuals on winning trajectories showcase:

Rapid skill acquisition
Expanding network effects
Increasing opportunities
Growing resource access
Compounding knowledge base

Fallacies and markets

Choosing the right seed could be perceived as gambling. The Gambler's Fallacy is the mistaken belief that if something happens more frequently than normal during a given period, it will happen less frequently in the future to "balance things out" (or vice versa).

In a fair contest where each game is independent, previous wins or losses have no influence on future outcomes.

Even after 100 wins in a row, the probability of the next game remains unchanged (assuming all other factors are constant).

However, the Gambler's Fallacy doesn't apply when lessons from one game roll into the next iteration and even less when trajectories are considered.

Just as some seeds carry better genetics from stronger parent plants, serial entrepreneurs carry forward their accumulated advantages. The "seed" metaphor refers more to potential and trajectory rather than purely to newcomers or first-time ventures.

Planting seeds and expecting future fruits is a complex probability problem. It can be expressed as multinomial distributions due to the many possible outcomes.

We can simplify this by reducing it to a basic binary question: "Will this seed result in a fruit?" This creates a simpler binomial distribution.

However, this simplification has limitations. It falls short when we're expecting rare outcomes or unique fruits - which is often the case in entrepreneurship and innovation.

While individual bets might be risky, markets have historically proven to be effective at pricing risk and predicting fruitful outcomes. This is where prediction markets enter the picture – they harness the collective wisdom of many participants to estimate probabilities of future events.

Should we start prediction markets for seeds?

Should we start prediction markets for picking the next unicorn?

Clever tech has been developed to simplify the process of spinning up this type of markets, yet reaching a critical mass of participants remains difficult. Critical mass is a combo of both number and variety of participants. Without such critical mass, the odds are not representative of said expectations. Some fundamental assumptions around incentive alignments needs to be made. Early traction could replace prediction markets, as a sort of clunky proxy.

Upward trajectories through compounding

If growth is a trajectory, patterns like the Hot Hand Phenomenon are more likely to be amplified. The flip side is that the regression to the mean doesn't hit as hard when on a trajectory.

Future events appear to be subject to randomness. Less so in hindsight.

Unlike pure chance games, entrepreneurs can leverage:

Accumulated experience and learning from previous ventures
Established networks (investors, talent, customers)
Pattern recognition; better ability to identify promising opportunities
Better risk assessment capabilities
Access to capital based on track record
Reputation advantages

These factors compound, increasing the odds of future success.

A (potentially-over)simplified model could look like this:

# python
def success_probability(previous_successes):
    # baseline success rate
    base_rate = 0.01
    # multiplier for each success
    experience_factor = 1.5
    # compound network effect
    network_factor = math.pow(1.2, previous_successes)
    # cap at 90% (relatively arbitrary. What is ever 100%?)
    return min(base_rate * experience_factor * network_factor, 0.9)

(Non-agricultural) Studies

HBS suggests founders who succeeded in a previous venture have a 30% chance of succeeding in their next venture.

Failed founders perform better than first-time entrepreneurs.

Experienced gardeners are better at spotting which seedlings show the most promise.

Network studies show that entrepreneurs' networks grow exponentially with each venture, supporting the network_factor in the probability model.

Closing thoughts

Growth is a process. Low to high, small to large, slow to fast.

Picking winners is a matter of spotting winning trajectories. Recognize the seedlings that show promise before they bear fruit. This insight applies beyond entrepreneurship to talent development, personal growth, and opportunity evaluation.

Remember:

Today's fruits were yesterday's seeds
The best time to plant was yesterday; the second best is today
Not every seed will sprout, but every success story started as a seed
Focus on trajectories, not just current results
Compound growth rewards early believers

Be early. Plant wisely. Nurture growth. Fruits will follow.

Closing questions

What trends today are seeds and what are their fruits?

What are the odds of a seed becoming a fruit?

Who is planting seeds today?

Reach out on Farcaster, LinkedIn or Twitter. Would love to hear your thoughts and challenges!

Fascination with Seeds Instead of Fruits