In this enlightening discussion, Kunal Shah shares his unique approach to evaluating startups and investing, via his Delta 4 framework.
This framework is designed to predict startup success, enabling investors and founders to make more informed decisions.
Delta 4 Framework by Kunal Shah: Everything you need to know
The Delta 4 framework, developed by Kunal Shah, is a predictive model for startup success.
It is based on the idea that startups evolve similarly to biological evolution, with a constant movement from inefficiency to efficiency.
The key factors of the framework include a delta of efficiency score greater than or equal to four, irreversible behavior, and a unique brag-worthy proposition.
Significance of Irreversible Behaviour
When a product or service meets the Delta 4 framework criteria, three significant changes occur.
It becomes an irreversible behavior, there’s a high tolerance for change, and it becomes a brag-worthy proposition.
These changes lead to a domino effect, moving humanity toward more efficient methods, thereby reducing local entropy and energy consumption.
Core Human Motivations
At the core, all humans share similar motivations, such as increasing social status, achieving success, and ensuring success for their offspring.
These motivations can be channeled into different streams, but they all originate from the same fundamental desires.
Application of the Framework
The Delta 4 framework is not just about adding technology to a product or service.
To be considered Delta 4, a product or service must genuinely improve the efficiency score of the desired behavior.
Startups that fail to apply this principle are at a higher risk of failure.
Framework for Evaluating Startups
The Delta 4 framework can be used to assess the potential success of startups.
It does this by evaluating the efficiency score of their product/service and determining if it meets the criteria for irreversible behavior and a unique brag-worthy proposition.
This approach enables investors and founders to make more informed decisions and increase their chances of success.
Every time the delta of efficiency score is greater than equal to four, three things happen: it’s an irreversible behavior, there is obviously very high tolerance, and you will hate Uber but you’re not gonna like damn it, I’m gonna delete this app and I’m going to move to a more inefficient behavior. – Kunal Shah
The core motivations of humans all boil down to the same thing: you want to increase your social status, you want to improve your meeting success, you want to have success for your progeny, and so on and so forth. – Kunal Shah
