photo credit: Simon Blackley - cc

photo credit: Simon Blackleycc

The Allee effect is a biological phenomenon that shows a positive correlation between population size/density and mean individual fitness within population.

Allee’s experiments demonstrated that goldfish grow more rapidly when there are more individuals within the tank.
Classical view: Due to competition for resources, population has a lower growth rate at a higher density and a higher growth rate at lower density.

The Allee effect indicates positive density dependence as well as a positive correlation between population density and individual fitness, resulting in “undercrowding.”

Is there a corollary in startups? Does the number of tech startups targeting an established industry mean higher odds of success for each? Even if they are competing for scarce capital/talent, will they make each other more competitive by sharing a playbook against a common enemy?

It would seem that the Allee effect for startups is deeply counterintuitive and directly opposed to Thiel/Musk theory of “one startup can monopolize the talent.”

Source: Andreessen’s tweets on the Allee effect and startups: 1, 2, 3, 4, 5, 6, 7, 8

Category:
Theories

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