I’m happy to present our second graphic blog series, featuring the six transformations of finance that form the core of The Nature of Investing. These ideas have emerged from the six sets of principles of biomimicry – the natural guides to life itself. When taken together, these evolutions illuminate a path towards investing that is reconnected, resilient and regenerative, in service to life.
Our second transformation is FROM SYNTHETIC TO SIMPLE, which reflects the natural concept of building elegant solutions with a small subset of materials.
In human systems, we often approach engineering challenges by introducing more and more complicated materials and designs. It’s considered a badge of honor to conquer limits, even if those limits don’t really need to be conquered in the first place. There are plenty of examples of this sort of needless conquering in our food system. For example, we used to make cakes at home, on special occasions, with just a few basic ingredients like flour, eggs, and sugar. But if you look at the ingredient list on many cakes in the supermarket, you find all sorts of other ingredients, most of which do not add anything that’s essential, or even desired. These additions allow cakes to last for weeks, or to be colored purple, or to taste like faux strawberries. But how often do we really need a long-lasting purple strawberry-like cake?
Similarly, in many of our investment products these days, we have layers of packaging and processing – funds of funds and securitizations of securitizations – yet only a small portion of that total processing and packaging provides real benefit.
Compare these human-engineered ingredient lists to a forest or a meadow, where most of what you see is just four simple elements: carbon, hydrogen, oxygen, and nitrogen. Moreover, when a tree reaches the end of its lifecycle, all of the components are recyclable and re-usable: in nature, there are no toxic leftovers, no landfill sites, no unintended risk correlations.
Or think of the products in a beehive – bees produce honey, royal jelly, and beeswax from simple inputs of nectar and pollen. Even more impressive, these products have a sophisticated “just in time” production process: there are no inventory pileups, no supply chain snafus to navigate, no complicated machinery to maintain. These bee products are tremendous examples of simple, elegant design.
If we incorporate this natural principle into our own endeavors, we can eliminate needless toxicity and focus our energies on elegant, effective designs where the inputs, products, and remains are all simple and useful.
* With great thanks to the Guts and Glory team for the fantastic design work!