Is the speed of learning and innovation more important than ever?
Good luck having any impact next year when you prioritize only output or outcomes.
Jeff Sutherland, co-creator of Scrum, claims, "The speed of innovation is the primary factor in business success." After his earlier somewhat controversial mantra of "twice the work in half the time," Sutherland is now leading the charge into a world where "AI accelerates product development by 30 to 100 times."
Wow.
It's not hard to imagine the eye rolls from the "value over velocity" crowd, where proponents insist that delivering value to customers matters most. Outcome over output! Or in the words of Peter Drucker:
"There is nothing so useless as doing efficiently that which should not be done at all."
As usual, both sides are wrong—or, perhaps I should say, both are right, but they miss half the picture. Impact beats both output and outcome. In the age of AI, you can achieve ten times the impact with one-tenth of the people.
Let's dig in.
On the Castle and the Moat
Imagine you are a pioneer in unexplored land. (This might be easiest for my 120+ year-old readers, but humor me.) Other adventurers arrive around the same time as you do, and suddenly, you find yourself competing for food, resources, the best spot on the beach, and the best hill for your base. (It's like participating in Survivor, but with fewer cameras and more cannons.) What's your highest priority when the competition prefers to see you gone, fail, or—in the worst case—dead?
Turns out that the Normans already figured this out in the tenth century: you build a castle and you dig a moat. You cannot spend all your time in battle with the other contenders; you need shelter, safety, and security. And a few strategic holes for positioning your cannons.
While you're scrambling for survival, as you build your castle and dig your moat, caring for the young and the weak is most likely not high on your agenda. Forget raising a family, forget teaching the new generation—first, let's see if you can survive the night and fend off the other barbarians! (It is an under-reported fact that very few parents sign up for Survivor with their babies.)
The Four Types of Moat
You still with me? Good. It's crucial to understand the castle and the moat before we discuss impact.
The moat is a well-known analogy in the world of startups and venture capitalists. It's a metaphor for strategic advantage and it rolls off the tongue more easily than strategic defense capability.
Just a few weeks ago, my digital assistants and I cooked up the Four Moats Theory™, which describes four kinds of protection that a startup can aim for. (You should read the article. It's as hilarious as it is inspiring.)
The Four Moats
- Information/Data Moats (data hoarding & AI models, e.g., Google's search data, Bloomberg's financial data)
- Reputation/Brand Moats (brand, trust, thought leadership, e.g., Nike, Ikea, Rolex, Nvidia)
- Network Moats (network effects & ecosystem lock-in, e.g., Visa's payment network, Microsoft's business software)
- Infrastructure Moats (owning the digital/physical pipes, e.g., Amazon's logistics, Taiwan's semiconductor industry)
Some argue that the leading AI labs (OpenAI, Perplexity, Anthropic, etc.) don't actually have strong moats yet. They lack exclusive data, entrenched reputations, strong networks, or unique infrastructure. Their LLM models turn out to be rather shallow moats. Chinese competitors such as DeepSeek and Baidu are proving how easy it is to replicate what their US counterparts are doing.
Meanwhile, Google, Amazon, Microsoft, Facebook, and Apple already have moats around their existing businesses. A few of them might be late to the AI party, but they can use their strategic advantages. The question is: can they do it fast enough to make an impact?
First Mover or Fastest Learner?
In some of my earlier books, I argued that the idea of first-mover advantage is overrated. What truly matters is the fast-learner advantage. After all, nearly all big companies today arrived late in their markets but outpaced the pioneers in their rate of innovation. Google was only the 20th search engine, launching five years after the first ones. Amazon? Three years after the first bookstore. Spotify? Seven years after iTunes. Facebook? Two years after Friendster. And so on.
The big question is: how much of this is still true in the age of AI? Is the speed of learning and innovation more important than ever, as Jeff Sutherland suggests?
Who Can Dig and Build Fastest?
Okay, let's talk about impact.
In the cut-throat game of business, it is never just about being first in an unexplored market. It's about being the first to build a castle (product/market fit) and dig a moat (strategic advantage). Once a company has both, it can start making life incredibly difficult for everyone else who is still scrambling to set up shop. It is then much easier to expand the domain and have more impact in this new, unexplored land.
Is innovation speed itself a moat? One of my assistants (Claude) suggested that it might be, but the others (Gemini and ChatGPT) were quick to shoot that down, and they weren't very kind about it.
Claude's point—innovation itself as a moat—is a classic Silicon Valley fantasy. He's picturing a world where the sheer brilliance of an idea keeps competition at bay. But breakthroughs are temporary; moats are enduring. Yes, some innovations temporarily look like moats, but unless they solidify into data, reputation, networks, or infrastructure, they fade. - Zed (ChatGPT)
Speed alone isn't a moat in itself—it's just the life-or-death skill required to dig one. In the game of business, no moat = no future. No future = no impact.
As Jeff puts it, "Otherwise, competitors beat us to the market, and it doesn't matter how good our product is."
And once you have your castle and moat, does that mean you're done? Will you then sit back, relax, and enjoy the value it generates for everyone? Probably not. It's more likely you'll be eyeing the distant mountains where nobody has settled yet. And you might prefer to take over that neighboring hill where one of your competitors is busy digging a moat that is just a little too close for comfort.
Your business wants to survive and thrive. You want to have an impact.
The Fallacy of Short-Termism
In my opinion, both the "innovation speed" camp and the "value creation" camp fall into the same trap: short-term thinking.
High-speed innovation is a short-term goal because the long-term goal is impact. Delivering outcomes to customers is a short-term goal because the long-term goal is a surviving and thriving business. Both output and outcome are important as long as they feed into impact.
Take the consequences of AI for career ladders: companies are ditching junior employees because senior lawyers, accountants, and engineers can now use AI to do the work that was previously done by entry-level employees. AI is faster, better, available 24/7, and it doesn't come with a gen-Z attitude. A laser focus on speed or value may boost success in the short term, but long-term it might spell disaster.
Without juniors, who becomes the next generation of seniors? Who will bring fresh ideas and challenge outdated assumptions? Who will pull the seniors out of their Curse of Knowledge by asking simple questions with a Beginner's Mind? No juniors today means a brain drain tomorrow.
Good luck having any impact next year when you prioritize only output or outcomes.
The Radical Resolution
So, back to our original controversy.
There is one goal in business: survive and thrive. That means securing your ability to deliver value, now and in the future.
If you're a startup, speed is everything. You're in the wilderness, unprotected. Your only mission is to build a castle and dig a moat faster than anyone else. Forget interns, forget juniors—just build and dig. Find product/market fit, establish strategic defenses, and leave everyone behind who only slows you down. Your immediate concern is surviving.
But once you have a stronghold? Now, you need to maintain it. That's when value creation overtakes speed. You let juniors in, even though they slow things down, because they ensure you still have a kingdom in the future. Strengthen the castle, deepen the moat, and keep a watchful eye on the competition and new land to explore. Now, your concern expands to thriving.
And when you discover new land, the cycle repeats. The first to build a castle and dig a moat wins. Pro tip: don't send the kids.
AI Changes Everything
Now, the golden question: How does AI change this game?
Jeff Sutherland puts it bluntly: "We need engineers who can leverage AI to attack a market much faster than in the past."
AI accelerates everything. Startups now hit $100M in revenue in less than two years (where it normally took them ten years on average) and they do this with smaller and smaller teams. They have ten times the impact with one-tenth of the people. The balance may finally be shifting from fastest-learner advantage to first-mover advantage, simply because there is so little time to catch up!
A few years ago, arriving late was inconvenient. Now, it could be fatal. The new reality is: if your competitors are using AI to build castles and dig moats faster than ever, you can't afford to show up late anymore.
Conclusion
So, what's the final answer?
Yes, speed of innovation is the primary factor in success if you're a startup. And yes, delivering value is more important than speed if you already have a defensible position. However, both are merely stages in the larger game of surviving and thriving in unknown territory—the larger game of having any meaningful impact.
And whether it's first-mover advantage or fastest-learner advantage, one thing is clear:
You have less time than before.
Smart People Don’t Follow Hypers or Doomers.
Many creators and leaders either blindly praise AI or cry about the end of the world. What if we navigate a better way? I try to make sense while others make noise.
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