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The defining entrepreneurial opportunities of the coming decades will not emerge from making existing markets more efficient. They will emerge from rebuilding markets to respond to the profound structural changes in society – demographic change, climate risk, the changing nature of work, and rising economic pressures. These forces are creating new forms of economic activity that existing institutions cannot easily organize.
For founders, this presents a fundamentally different opportunity. Success starts with important work that goes before the fun of building products: fully understanding and engaging the system a product will enter, and building the buy-in it needs to achieve distribution at scale.
Founders, who traditionally like to disrupt in stealth, move fast, and break things, might now have to win through coordination, negotiation, and social license.
The Philosophy
As entrepreneurial innovation increasingly addresses large, critical markets where responsibility and incentives are fragmented across multiple stakeholders, systems thinking becomes essential. Systems thinking is the discipline of understanding how different people, institutions, incentives, technology, and markets work together to organize economic activity. By understanding and incorporating these dynamics at the inception of company design, technology founders can significantly improve the odds of adoption for their innovations and of building enduring companies that deliver real value at scale.
A Framework for Evaluation
Founders are naturally drawn to designing products, business models, and go-to-market strategies. Systems thinking asks them to pause. Before deciding what the product should be, founders must first understand the environment in which it will operate. While there is ample material on customer discovery, hiring, cap tables, there isn’t enough literature on systems thinking. Here are a few questions that can begin to help founders establish that foundation. I use short examples from a company in the “Food is Medicine” space
What is the system reality? What problem is the system really trying to solve? Who participates today, who doesn’t, what incentives shape their behavior, and where can STEM reduce friction? We received a grant for Roots Food Group to provide medically-tailored meals to patients with chronic disease as substitutes for medicine. An unexpected key objective for the political sponsors of the grant was ameliorating food insecurity. So the food had to be made available to all members of the primary household of a qualified recipient.
What is preventing progress? Every system has an unexpected constraint. It may be technology, but it is more than likely to be trust, regulation, fragmented incentives, information, or coordination. At Roots, an unexpected constraint was user skepticism of efficacy of the food, and the quality / taste of frozen meals delivered in 12-week increments.
Who needs to succeed? Markets do not emerge because customers adopt a product alone. They emerge because the institutions and stakeholders that shape the market also find it worthwhile to participate and to meet their goals. For Roots, demonstrating value to insurance companies who are the ultimate payors was critical.
What rules shape the market?: Every market operates within a framework of standards, governance, regulation, contracts, and social norms. Founders who understand those rules can work with them, or advocate for the ones they need to change. For Roots, we invested a tremendous amount of work to influence the FDA on updates to the guidance and interpretation of the Medical Food Category.
What happens next?: Every intervention changes the system itself. The most durable companies anticipate those second-order effects and strengthen the systems they enter rather than simply extracting value from them. A healthier food system eventually reduces the need for medicine. Positioning thoughtfully especially with powerful pharmaceutical incumbents can become a competitive advantage.
Why this Matters Today
Foundational systems underpin social resilience, traditionally a primary source of national competitiveness. Yet those systems are increasingly under an enormous amount of strain. Economic mobility is declining as more families lack the financial security to invest in their futures or take entrepreneurial risk. Healthcare costs continue to rise as chronic disease, mental health challenges, and stress become more prevalent. Climate change is amplifying these pressures through more frequent extreme weather, worsening air quality, and resource constraints. While these challenges appear distinct, they are fundamentally interconnected. The founders who can align fragmented stakeholders and reshape incentives will create the next generation of enduring companies.
Why this is Possible Now
Systems thinking has long been intellectually compelling but difficult to apply in practice. The relationships that shape complex systems were often too intertwined or siloed to observe, too difficult to coordinate, and too dynamic to understand with confidence. That is changing. Advances in data, AI, and computational tools are making it possible to distinguish correlation from causation, identify feedback loops, and evaluate how interventions propagate through a system. At the same time, digital platforms have dramatically reduced the cost of coordinating people, institutions, and markets. The scale of the opportunity and challenge also raises the incentive for different stakeholders to collaborate and find shared outcomes.
A Connection to the Fairbridge® Thesis
At Fairbridge®, we believe that enduring companies emerge from the intersection of three key ingredients.
Scientific and technology advancement introduces new design possibilities that were previously unimaginable e.g., hyper distribution, or hyper-productivity.
Lived and learned experience surface unconventional insight that enables founders to build truly differentiated companies.
Systems thinking aligns the institutions, incentives, and stakeholders required for new markets to emerge and scale.
Our job at Fairbridge is to help founders assemble the alliances, resources, and capabilities needed to win in this new dispensation.
In Summary
Systems thinking presents a new opportunity that many founders might not be thinking about enough. Mission-driven founders with ambition to shape the next generation of markets to build inclusive markets will need to embrace systems thinking. While this work might initially feel “diplomatic and measured” rather than “disruptive and fast”, it will pay bigger dividends and deliver superior outcomes for societies and for investors who choose to make the investment.
In my next post, I will present a case study for one our portfolio companies and how systems thinking is helping them to create value… Stay tuned.
Giving and Receiving
I wanted to test a new concept on this blog to create a flywheel of reciprocity. With every other post, I will make a give and and an ask.
My give: Many of you have been raving about Fairbridge’s new website. If you’ve been patching together a designer here, a developer there, and a freelancer for everything else then I want to introduce you to Britalian. I’ve really enjoyed working with Jade and William. Britalian offer a full-service digital agency that works across the whole stack: brand identity, web design, development, media, and events. Reach out here or at [email protected]
The Ask: We are looking to hire an excellent principal to run our investment program. Please reach out to me with recommendations for anyone in your network with superior investing acumen and a passion to reimagine foundational systems.
Join our Mission
Please share this post with builders, investors catalysts, and policy people in your networks!!
If you would like to explore collaborating on this topic and partnering with Fairbridge in our work for accelerating social progress, I'd love to hear from you. And if you are a founder, you can apply for funding.
And, finally, a big thanks to Apollo, our sponsoring partner this week!
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