Entropy and Marketplaces
Uber launched in multiple African cities between 2013 and 2016.1 Drivers moved their life savings into buying cars. Demand showed up. Ten years later, those same cars — the ones that were supposed to replace old, inefficient taxis — have themselves become old and inefficient. The disruption decayed back to the starting point.
I studied chemical engineering. The concept I keep returning to in business is entropy — the idea that any real change in a system generates disorder. You cannot avoid it. But there is a critical distinction between reversible and irreversible processes. A reversible process conserves resources. An irreversible one destroys them permanently.
Marketplaces generate entropy. That is the job. You are rearranging how people move, pay, buy. The question is whether the disorder you create is productive or wasteful.
Uber in Africa was irreversible entropy. Drivers put in capital. There was no financing structure to renew the asset base. No way to make the vehicle scoreable so a bank could underwrite the next one. The system consumed savings and produced nothing that sustained itself. In Europe, the entropy was political — regulatory pushback city after city that is still blocking value creation in some markets a decade later.
The design problem is specific. Generate enough disruption to displace incumbents and shift consumer behavior permanently. But do it in a way that conserves the resources in the system — driver savings, regulatory goodwill, investor capital — so the next cycle builds on the last one. James Scott called the good version "thin simplifications"2 — interventions that add just enough structure to unlock value without destroying the local knowledge that makes the system work.
The practical question is sequencing. Which side of the marketplace do you build first, and how do you connect each phase to the next so the resources invested in one cycle carry into the next? In transport, this means supply first — vehicles on roads, connected to data, connected to financing. I wrote about the specifics of this in The Financing Loop and The First 72 Hours in a New City.
The entropy lens is about something larger. Every marketplace rearranges an economy. The question is whether the rearrangement conserves enough to sustain itself — or whether it burns through capital, goodwill, and human savings with nothing durable to show for it. The businesses that last are the ones that fill a gap so fundamental that the disruption becomes the new default. Low entropy. High durability.