The Magic Bike Company

The Butterfly Effect

“A very small cause which escapes our notice determines a considerable effect that we cannot fail to see, and then we say the effect is due to chance. If we knew exactly the laws of nature and the situation of the universe at the initial moment, we could predict exactly the situation of that same universe at a succeeding moment. But even if it were the case that the natural laws had no longer any secret for us, we could still only know the initial situation *approximately*. If that enabled us to predict the succeeding situation with *the same approximation*, that is all we require, and we should say that the phenomenon had been predicted, that it is governed by laws. But it is not always so; it may happen that small differences in the initial conditions produce very great ones in the final phenomena. A small error in the former will produce an enormous error in the latter. Prediction becomes impossible, and we have the fortuitous phenomenon.” — Jules Henri Poincaré (1854–1912)
Marketplaces are, in essence, chaotic systems that are influenced by tiny changes. This makes it difficult to predict the future, as the successes and failures of businesses can appear random. Periods of economic growth and decline sprout from nowhere. This is the result of the exponential impact of subtle stimuli—the economic equivalent of the butterfly effect.
Preparing for the future and seeing logic in the chaos of consumer behaviour is not easy. Once-powerful giants collapse as they fall behind the times. Tiny start-ups rise from the ashes and take over industries. Small alterations in existing technology transform how people live their lives. For example the iPhone. Fads capture everyone’s imagination, then disappear. The modern hula hoop invented in 1958 by Arthur K. "Spud" Melin and Richard Knerr. manufactured 1.06-metre (42 in) hoops with Marlex plastic. With giveaways and national marketing and retailing, a fad was started in July 1958;[4][5] twenty-five million plastic hoops were sold in less than four months, and in two years, sales reached more than 100 million units. The hula hoop craze swept the world, dying out again in the 1980s,
Brian Chesky, founder Airbnb speaking at the Start Up Class “I quit my job, I was living in LA. One day I drove to San Francisco, became roommates with my friend from college, from the Rhode Island School of Design, Joe Gebbia, and I had one thousand dollars in the bank and the rent was one thousand one hundred and fifty dollars. So that weekend this international design convention was coming to San Francisco, all the hotels were sold out, so we decided to turn the house into a bed and breakfast for the conference. I didn’t have a bed, Joe had three air beds, we pulled them out of the closet and called it The Air Bed and Breakfast. That's how the company started. By solving our problem it became the big idea.”