Cycles and Patterns

or “History doesn’t repeat, but it sure does rhyme”

As the year comes to an end, and folks start to publish their end of the year reflections (here are some fantastic ones), whether in writing, or on social media, I thought I would add my own flair to that trend and talk about something that’s been constantly on my mind over the last year (less concretely, over the last few years).

It’s something I’ve come back to time and time again, in conversations with friends, listening to a few podcasts, when watching talks online, when reading books which try and capture some sort of history of an event or trend, or generally, when I’m thinking through things on one of my bike rides or runs.

It’s the notion of Cycles and Patterns.

As a fairly risk-averse person (a realization which crystallized during a particularly gnarly hike in Colorado in 2021), I stumbled upon this idea while trying to reduce future risk in most large systems (which were out of my control) in my life - finances, investments, health, career, general trajectories of technologies, and overall just trying to understand the world since it’s been a wild ride these past couple of years and it’s scary not knowing what’s next or how it could affect you and your loved ones.

I call it “trying to reduce risk” whereas in reality, my internal monologue looks more like - “don’t be wrong about this (important decision)”, “make sure you don’t act/talk/look like an idiot”, “why am I paying so much for food these days, I need to save for that trip”, “why is it so hard to get this registered”, “why are there so many steps in (important life process)”, “why are things so fucked up - will I be impacted? I hope not, I don’t know what I would do”.

The idea that there could be something larger but simpler at play in these systems was something I borrowed from Shane Parrish’s excellent blog (on this and in general) on Mental Models.

The next seed of crystallization was when a former manager told me about Barksdale’s quote when questioned by a reporter about the competition: “Gentlemen, there’s only two ways I know of to make money: bundling and unbundling.”” which is something Marc Andreessen has trotted out a few times.

And the final piece fell into place when I was reading Ray Dalio’s latest book on the Changing World Order. Regardless of the ulterior motives of the book and its narrative, I felt seen by his analysis around the theory that there are larger cycles at play in the financial world order that, if correctly observed, can help guide one through periods of uncertainty.

So here’s my conjecture:

Across different parts of the world, various domains of society - religion, politics, government etc - and industry - technology, manufacturing, construction, financial systems of various kinds etc - and more importantly, across different periods in time, there are cycles and patterns of how things occur which can help us have an idea of what’s going to happen next by looking at what came before, if we get the context right.

Patterns

Patterns are the occurrence of one idea across different domains. A few examples

• Diminishing influence, loss of power due to ease of distribution - The dynamics of how established media worked with/against social media mirror how the arrival of the printing press influenced religious hegemony since books became easily accessible and distributable in the 1500s.
• Trying to predict the impact of anti-trust legislation on BigTech by looking back in history on how anti-trust legislation hit JD Rockefeller and Standard Oil’s behemoth of a business (phenomenal multipart podcast), or
• How possibly fusion may not produce what Dave Friedberg calls “practically free energy” but instead accumulation of wealth and power by selling of said “free energy” from the haves to the have-nots, or
• The death of nuance - how loss of context/context collapse negatively affects discourse in general - whether it’s social media, political, identity-based, academic, or journalistic discourse.

Cycles

Cycles are instances of the same idea happening in the same domain after some unspecified amount of time. Though the period between repetitions of a cycle might vary, it’s not time but context or it’s resetting that defines when the cycle occurs again. Some examples may be:

• The cycles of boom and bust and the interplay between technological innovations and financial bubbles: I’m reading the amazing work of Carlota Perez Technological Revolutions and Financial Capital which talks about how financial cycles are coupled with technological revolutions.
• How labour unions are slowly making a purported comeback, after having mostly been inconspicuous during the golden era of BigTech (“Are labour unions making a comeback” - NYT), or
• How content distribution services seem to be following the cycle of “bundling and unbundling” - Netflix took us out from under cable and introduced streaming of unbundled content, and now we have “bundles” of streaming services - e.g. the “Disney+ bundle” that now includes Disney+, Hulu and ESPN, or
• The premise of Ray Dalio’s book - The Changing World Order - how there are cycles in the global order and how one can study the past versions of those cycles to position oneself better for the future, or
• Globalization and the recent trend of de-Globalization (or cycles of decentralization and centralization) from WSJ or,
• The Semiconductor Cycle and many more.

To be clear, there are definitely more nuances to each of the examples I’ve mentioned and I’d definitely be wary of overgeneralizing since accurately knowing each of these sub-domains probably takes a lifetime of careful study, but it’s been interesting to see some of these play out and look back and see more than a few commonalities. It particularly stands out when reading books which provide overarching narratives of entire swathes of history.

My hypothesis is that with sufficient context, there are templates which one can use to position themselves in the world to be prepared for what’s coming next.

Risk-averse? Who, me? Pfft.