photo credit: Simon Blackley – cc
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
@pmarca Says 