Atoms And Bits (A Service Model)

Venture Capitalist Fred Wilson has a mental model he calls “atoms and bits.” He uses it for startup investing, but we can steal it for thinking about problem-solving with clients. I’m always looking for tools to help display how we can be intelligent organizers of tedious information and processes as a means to show value. This is a good one.

“Atoms” refer essentially to people. Emotional, confused, irrational – all of the glories of having a brain.

“Bits” refer to anything programmable. Logical, able to be automated, rational – all of the glories of having a computer.

When we sit across from someone (or when Fred thinks about a business or market segment to invest in), it can help to “bucket” which questions or needs can be met with atoms or bits. Think of it as an organizational tool to display the process for reaching a solution.

As a rule, anything that can be repeated 3 times can probably be automated or at least turned into a checklist. Budgets, bills, paperwork – this is the stuff we can turn from stressful and/or time-consuming to a repeatable process for someone (including ourselves). We can use the analogy of bits to help explain how we’ll get the stress and hassle of a process under control.

Conversely, anything that requires mental effort and energy due to its dynamism is likely a human problem. We can’t turn these atoms into something easy in the automated sense, but we can label and explain that our approach will be more like a coach (or an amateur psychologist). Saying “that’s interesting, we’re going to have to continue to talk about that in more detail,” validates we see a process that can’t just be reduced to a checklist. Acknowledging the emotional complexity here and recognizing the person’s individuality can go a long way.

So next time you’re trying to display or create value for someone, give the atoms and bits approach a try. If you start by trying to separate what you can help them automate from what you can help them emotionally navigate, you’ll be well on your way to justifying your professional relationship.

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