There don’t seem to perfect definitions for either recessions or depressions. A recession is commonly defined as two successive declining quarters of GDP, but it’s not gospel. And a depression is a kind of prolonged recession for 3–4 years. So I liked Harry Truman’s clarifying explanation — US president from 1945–1953:

A recession is when your neighbour loses his job.  A depression is when you lose yours.  —Harry Truman 

Recession vs depression

This is military strategist John Boyd’s framework for combat operations that also turns out to apply quite well to businesses and learning in general. It’s really not that far from the ol’ test-learn cycle or a good design process.

There’s lots of nuance to his framework, but some of the application of it that I like includes:

The faster you can do this loop — at your startup or in a fight — the more stuff you will get to try and the faster you will learn

If you’re in competition with another entity then completing your OODA loop fast, and acting to change the environment for them, disrupts their loop and forces them back to observe before they can act. It slows them down and creates confusion

I learned about it from Reid Hoffman’s excellent Masters of Scale podcast.

OODA Loop

Networks effects can lead to massive, rapid growth. Amazon has leveraged this little sketch by Jeff Bezos in 2001 for mega growth — Amazon calls it a virtuous cycle — and, more recently, the Uber variation, by David Sacks explains much of Uber’s wild ride.

When you build a platform that leverages network effects right it can enable growth way beyond what has historically been possible. Also, see Metcalfe’s Law.

The ‘Virtuous Cycles’ of Amazon and Uber