At least according to Antonio Gracias, founder of Valor Equity Partners, there’s a new key term to know as part of this AI revolution.
While talking this year Preliminary summit in Los Angeleshe talked about the term proentropic, a descriptor for startups designed to thrive in chaos and disorder. Such upheavals include increased variability in climate and geopolitics and, of course, technology.
The term has its roots in physics, where entropy is a measure of the amount of disorder or uncertainty in a system. The second law of thermodynamics is that disorder in a system will increase with time and cannot be stopped; it is natural for a system similar to real life to always move towards a more disordered state.
Gracias admitted that the term can be difficult to understand, and he began thinking about it in 2013 when he thought that the combination of globalization and technological change would “change all power structures” globally.
According to him, the world has been heading toward chaos since at least the end of the last century “as the number of people increases and technologies change.”
“We’re looking at businesses that are really good at predicting the future and figuring out where we’re going,” he said, citing portfolio company SpaceX as an example.
“It’s not just that they’re in the market today (what they think works), but (they’ve) built into their strategy and their people a probabilistic mindset about the world” — meaning things can change at any moment.
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“It really takes into account what can happen in extreme cases and actually takes advantage of them,” he said.
Elsewhere in the conversation, he talked about the firm’s belief strategy and again referred to the macro state of the world. “Now we’re entering a period in the economy where if you really want to build a better world, you have to have moral courage.”
He spoke about the intersection of climate, energy and technical tools, using Tesla as an example. “If you know how to integrate software and hardware, you can do great things with a lot of computing,” he said. Gracias also talked about what he thinks the future of this moment will be.
“The common narrative is that AI will be terrible. Job losses, social unrest,” he said. “And I think that’s not true. I’m going to work hard over the next five to ten years to make that true.” Instead, he thinks the possibilities are greater than ever.
For example, he thinks that as low-code/no-code tools become more effective, more people will be able to build companies and thus unleash unprecedented levels of productivity. “Who knows what they’ll build,” he said.
“We will decide whether we have a utopian or a dystopian future.”
