Optimizers seek the best ratio of input to output, often capping their scale. Maximizers focus on total output, willing to accept lower efficiency (diminishing returns) to achieve a larger absolute result. In competitive markets, the absolute result is what determines the winner.
The math used for training AI—minimizing the gap between an internal model and external reality—also governs economics. Successful economic agents (individuals, companies, societies) are those with the most accurate internal maps of reality, allowing them to better predict outcomes and persist over time.
Maximizing daily output does not maximize yearly output. Long-term success requires investing in activities like building trust, relationships, or skills, which often yield no immediate returns and may seem inefficient day-to-day. Consistently choosing short-term tactics over long-term strategies ultimately limits growth.
Instead of seeking new, unproven strategies, businesses should focus on massively scaling activities that already work. This approach leverages a known variable, minimizing the risk of failure associated with change and offering the most predictable path to growth.
Contrary to the belief that number two players can be viable, most tech markets are winner-take-all. The market leader captures the vast majority of economic value, making investments in second or third-place companies extremely risky.
Most companies use AI for optimization—making existing processes faster and cheaper. The greater opportunity is innovation: using AI to create entirely new forms of value. This "10x thinking" is critical for growth, especially as pure efficiency gains will ultimately lead to a reduced need for human workers.
Entrepreneurs often assume the product generating the most revenue is the most valuable. However, when factoring in the time and energy required for delivery (return on time), that "bestseller" might actually be the least profitable per hour, making it a poor candidate for scaling.
Every change introduces a temporary performance decrease as the team adapts—an 'implementation dip.' This guaranteed loss often outweighs the uncertain potential gain from minor tweaks. Real growth comes from compounding skill through repetition of a working system, not from perpetual optimization.
In today's volatile market, speed and agility have replaced sheer size as the primary competitive advantage. As stated by Rupert Murdoch, it's 'the fast beating the slow.' Startups often win by rapidly responding to customer needs, allowing them to outmaneuver slower, larger incumbents.
The highest risk-adjusted return comes from amplifying what already works. The likelihood of a new marketing channel or sales script succeeding is statistically low. Instead of rolling the dice on something new, you should allocate resources to dramatically increase the volume of your proven winners.
Don't get trapped in optimizing for efficiency (e.g., highest ROAS). Focus on maximizing absolute output (e.g., total profit), even if it means accepting diminishing returns. The difference between first and second place is everything, and it's won by maximizing total output, not by being the most efficient.