Catalysts and Inhibitors

Todd Gould, CEO CEO's Letter

A vibrant capitalist system requires frothy competition, which fosters growth, innovation and cost reduction. Do you compete in a vibrant way to provide the best product for your customers, or do you spend time, energy and resources playing a defensive game to prevent your competition from competing?

Sometimes we need to step away from our business jargon and terms such as market enablement and legacy incumbent and see how nomenclature from other disciplines work to describe the situations we find ourselves in.

Personally, I am a chemist; I earned a degree in Chemistry and Materials Science form UCLA. Back in those days the books I read were full of terms I rarely see today: redox, valence, eutectic, diffusion, λ = 2d sin θ, etc.

The two terms that struck me today where Catalyst and Inhibitor. Catalysts speed things up by lowering the activation energy required to initiate a reaction and inhibitors slow things down by increasing the energy required. Not clear, check here.

In business a catalyst is a product or service that makes it easier; easier to close a deal, grow a market, communicate, transport, etc. The Internet is an amazing catalyst as is the iPhone.

Inhibitors make it harder; harder to enter a market or sell one’s products, or limits competition. Monopolists are classic inhibitors as are legacy incumbents who prevent new competition into the market.

But by no means are catalysts all good and inhibitors all bad. Things like lobbyists for big business are catalysts. Laws against corruption and stealing are inhibitors that work in favor of a functional capitalist market. Regulations can be good or bad inhibitors, while tax incentives can be good or bad catalysts.

Are you a good catalyst or a bad inhibitor?

Todd Gould
Loren Data Corp.