There are so many things I love about Permaculture principles. They are my North Star for the design of the systems-based investment principles at Pythia Capital. I knew nothing about them and the way they came into my life was as if I were suddenly a character in “The Celestine Prophecy” or a character in one of my dreams. I was in La Jolla, California, staying at a small hotel. I was having a very rough time in my life, personally and professionally. I man I never met before knocked on my door. Strangely, I answered. He told me he was a Buddhist Monk and that he knew I was struggling to make sense of things. He wrote on a piece of paper “permaculture” and then did some dance around me, saying a mantra I do not remember. I still have that piece of paper and I look at it when I am discouraged and frustrated. It always make me smile and fills me with hope. After that I took a weekend class at University of Massachusetts in Amherst on Permaculture (sustainable agriculture principles). I fell in love with the beautiful students and had a real “ah ha” moment in my life. It took me a long time after that to figure out what this all meant for me. Since then, I have added Chaos (Complexity) Theory into the mix for any of those people that need to see the validation of advanced math, science and computing power to believe anything. Permaculture is the Yin and Chaos Theory is the Yang of my business and finance ideas. Where does this all lead to? I have realized along the way, it leads to a new set of systems-based design principles that are new models for how to restructure finance, to save capitalism, not replace it. It is a framework to move from linear, reductionist business and finance principles (all or nothing, win/lose principles that are unfair, non-diverse, extractive principles that destroy the environment and destroy lives…) to the world of non-linear and win/win finance and economics (to create a world of diverse, empowered, highly creative people, an thriving communities full of vitality). This framework leads to quantum physics, alternative energy, regenerative medicine, regenerative agriculture, true preventative healthcare, better education principles, healthier food, a healthier environment, a more humanistic artificial intelligence. It leads to more cooperation, more community spirit, healthier and more diverse, creative and vibrant local ecosystems.[Read more…]
The first principle in permaculture which is a complex adaptive system methodology involves “observation.” It sounds simple enough, right? If you are creating a new product or service, you often start out with a value proposition that addresses a genuine need in society. As part of that discovery process you observe. We have many more advanced tools such as computing power, artificial reality, advanced mathematics, and new visualization tools that can enhance this part of the process. Observing in a complex, non-linear, living system requires looking at things in holistic views, looking at all the intersecting and interdependent parts and key nodes in the system. This is the level of transparency that is possible today as we bring together these advanced technical tools and interdisciplinary teams and it is really incredible. To solve big problems, now you have an actual chance to do it right.
Oops…we might be getting ahead of ourselves. Now we get to see what is hidden. We get to see what we have done wrong. We get to see all the problems that are overlapping and how things relate to one another. It is like one day we put these new cool glasses on and can see what we could not see before. The process of using a living, non-linear, complex systems based methodology to examine problems in society is already leading to big breakthroughs in science and technology such as new digital currency tools, studying the microbiome in biology or the promise of regenerative medicine. As we apply these tools in finance and the global economy, it starts to paint a less glamorous view and a troubling picture. If you are going to ask the questions, you have to be prepared to hear the answers. This is the part of this process that requires real courage, especially if you really want to offer products and services that solve serious problems in society at the root cause. Even when the evidence is undeniable, people still bury their heads, deny the obvious. Given the transparency that is possible today, however, the truth will come out sooner or later. This is just the first stop on our journey with this process, but one of the most enlightening, and, at times, one of the most difficult.
The following quote is from an online journal called “The Daily Reckoning” and is from Charles Hugh Smith. Even if you do not agree with his conclusions, the data that points to these highly centralized systems is hard to ignore.
“Systems that are highly centralized, i.e., dependent on a handful of nodes that are each points of failure — are intrinsically fragile and prone to collapse. Put another way, systems in which all the critical nodes are tightly bound are prone to domino-like cascades of failure as any one point of failure quickly disrupts every other critical node that is bound to it.” (https://dailyreckoning.com/bailouts-cant-save-this-fragile-system/)
A follow on article by the same author is related to our habit of looking at the past to guide the future. This is done automatically in finance and provides relief to people over the short term that everything will be okay. Since this is an incongruent and unbalanced system, eventually the past will not predict the future. The prevalent view looking at the way the market has rallied after recent stock declines seems to be that if we just keep bailing out this unstable financial system, the market will keep going up as it usually does after large financial intervention. When is this time different? When does the past no longer predict the future? (https://dailyreckoning.com/this-isnt-just-another-crash/).
Using natural ecosystem principles to rethink how our economic system functions is very timely. As scary as the truth can be, there are natural, regenerative principles that are waiting for us when we are ready to use them. We can begin to apply them step by step, project by project, fund by fund. They are very bottoms up, resilient sustainability principles that are the antidote to fragile, centralized systems. They are naturally diverse, efficient, effective, inclusive, and beautifully creative principles. They help guide balance between serving our individual interests and the collective good of society without getting into bipartisan fights based on outdated ideologies.
We live in very chaotic times with extremely divergent perspectives on how to solve important problems such as healthcare, education, poverty, environmental problems and other social issues. It is clear that the overly simplified, and fixed ways that groups of like-minded people come together to solve problems is not working. It is the most natural thing in the world to work with people with aligned points of view. Much of the financial and investment industry operates this way. Much of the two party political systems work this way. If you spend all your time and energy and grew up with a certain frame of reference for how to solve problems, a particular filtering system for how you view the world, it is not very easy to overcome these inherent biases, especially when it has been successful for you financially, personally and professionally. This often results in fear, anger and very divergent perspectives and points of view that make the divide wider. There is no bridge in sight, just a wide space underneath with crocodiles and a large fall for those brave few that venture forth to bring people together. For those brave few, they often end up disheartened, broke and much less hopeful than when they started. Hidden behind even the seemingly well intentioned is often an agenda to maintain the power and status quo by those with the most resources and the most power in the existing paradigms. [Read more…]
We are borrowing permaculture principles for designing sustainable agricultural systems as our guide for our sustainable investment model. It helps to guide how we are structuring our company, how we screen for investment projects, how we guide our companies to sustainably build their businesses, how we think about aligning incentives, how we think about systemically analyzing problems and solutions, how we think about competition vs. collaboration/coordination, how we view ethics in business and finance, how we view the most effective path to leverage innovation and creativity to build resilient and prosperous companies. We use this framework for analyzing a wide variety of companies and industries. It is not a framework that only pertains to agriculture. [Read more…]
I saw the movie “Arrival” over the weekend and I thought it was a wonderful movie. It has been on my mind since then and I chuckle to myself that a movie involving 12 Alien Space ships landing on Earth could reach me the way that it did. Ah ha, I said to myself. There were 12 Alien ships just as there are 12 permaculture principles (the principles to create a sustainable agriculture system that we are borrowing to apply to our sustainable business and investment model). There are also 12 rays of the sun. Okay, Okay, this may seem like a bit of a stretch, but indulge me for a minute (I will give you a hint about the connection and it involves principles of unity). This movie had a very yin yang aspect to it. [Read more…]