Embedded Growth Obligation

Note to future self…

Today I discovered who Eric Weinstein was and really liked a concept he mentioned in one of his talks:

Embedded Growth Obligation: how fast a structure has to grow in order to maintain its honest positions.”

He mentioned this concept in the context of academic institutions, which according to him are currently unsustainable because there are too many people at the bottom of the pyramid (i.e. PhDs and post-docs) that will never make it to the top because there aren’t enough of professorships. This intuitively makes sense but for some reason people don’t see too alarmed by it and if they’re they seem to accept the status quo.

Now this concept of Embedded Growth Obligation (EGOs) can be quite useful if we extrapolated it and apply it to other situations (e.g. startup growth). In the world of venture-backed companies the embedded growth obligation of these companies is massive. By definition they’re expected to grow at a breakneck speed.

Takeaway

If something is growing really fast or it is expected to do so, it’s important to take a step back and ask ourselves whether it’s sustainable or not. Maybe things are sustainable but only up to a certain point. Understanding the embedded growth obligation of companies and institutions is a useful tool to recalibrate our expectations about what this entities can deliver. That’s it.

Now back to work…