The Klepperian Explosion

Here's your blog post draft: --- **The Klepperian Explosion** Most people have heard of the Cambrian Explosion—that remarkable period roughly 540 million years ago when, in a geological blink of an eye, nearly all major animal groups appeared in the fossil record. Life had existed for billions of years before, but suddenly we went from simple organisms to an explosion of complex body plans that gave rise to most animals we know today. I think AI is about to trigger something similar in the business world. Let me explain why, and introduce a concept I'm calling the **Klepperian Explosion**. **Steven Klepper and the Strategic Disagreement Theory** Steven Klepper was a Carnegie Mellon economist who studied how industries evolve, particularly through spinoff formation. His research on the automobile, semiconductor, and laser industries revealed a fascinating pattern: the most successful new companies weren't random startups—they were spinoffs from incumbent firms, founded by employees who disagreed with their employer's strategic direction. In his 2007 paper in *Management Science*, Klepper wrote: > "Disagreements between employees and their employers about the best way to compete are proposed as a key factor driving employee spinoffs." And in his 2010 work in the *International Journal of Industrial Organization*: > "The best spinoffs are founded by employees who leave firms pursuing strategies that differ from their own conception of how best to compete." The classic example is Fairchild Semiconductor. When employees there disagreed with management's vision, they didn't just quit—they founded Intel, AMD, and dozens of other companies that built Silicon Valley. The disagreement wasn't personal; it was strategic. They saw the future differently than their bosses did. **Why AI Creates Perfect Conditions for Strategic Disagreement** This brings me to the present moment. AI is creating the exact conditions Klepper identified as triggers for spinoff explosions: **First, there's a massive capability gap.** Younger employees and AI enthusiasts often understand these tools far better than senior leadership. When you can see what's possible and your organization refuses to pursue it, that's precisely the strategic disagreement Klepper described. **Second, incumbents are constrained by their existing business models.** Large companies have revenue streams to protect, processes to maintain, and risk-averse cultures to satisfy. An AI-native company has none of these constraints—they can build from scratch around AI capabilities. **Third, the barriers to starting AI-native companies have collapsed.** A small team with the right AI tools can now accomplish what once required hundreds of employees. The economics of spinoff formation have never been more favorable. **What I've Observed Firsthand** In [my own research on high-intensity ambivalence](https://www.doctorhump.com/High_Intensity_Ambivalence.pdf), I found striking evidence that workers are simultaneously excited about AI's potential and frustrated by their organizations' failure to embrace it. Using GPT-5 as part of my research methodology, I analyzed sentiment patterns that reveal this tension clearly. This combination—seeing the future clearly while watching your employer ignore it—is exactly what drove the Fairchild engineers to found Intel. As Ethan Mollick has documented extensively, the gap between what AI can do and what most organizations are doing with it is enormous. **The Coming Explosion** Here's my prediction: we're about to witness a Klepperian Explosion—a surge of new company formation as AI-literate employees leave incumbent firms to build AI-native alternatives. The strategic disagreements are already everywhere. The capability gaps are widening. The barriers to entry keep falling. The Cambrian Explosion happened because environmental conditions suddenly favored biological innovation. I believe we're seeing something similar: conditions that suddenly favor organizational innovation, driven by employees who see what AI can do and refuse to watch their employers ignore it. The question isn't whether this will happen. It's whether you'll be part of it—and on which side. --- How does this feel? I can adjust the tone, add more from the Klepper papers, or reshape any section.

Here's the updated draft with expanded Cambrian explanation and just your research linked: --- **The Klepperian Explosion** Most people have heard of the Cambrian Explosion—that remarkable period roughly 540 million years ago when, over the span of about 20 million years, nearly all major animal phyla appeared in the fossil record. Life had existed for billions of years before, but suddenly, in a geological blink, we went from simple organisms to an explosion of complex body plans that gave rise to most animals we know today. I think AI is about to trigger something similar in the business world. Let me explain why, and introduce a concept I'm calling the **Klepperian Explosion**. **Steven Klepper and the Strategic Disagreement Theory** Steven Klepper was a Carnegie Mellon economist who studied how industries evolve, particularly through spinoff formation. His research on the automobile, semiconductor, and laser industries revealed a fascinating pattern: the most successful new companies weren't random startups—they were spinoffs from incumbent firms, founded by employees who disagreed with their employer's strategic direction. In his 2007 paper in *Management Science*, Klepper wrote: > "Disagreements between employees and their employers about the best way to compete are proposed as a key factor driving employee spinoffs." And in his 2010 work in the *International Journal of Industrial Organization*: > "The best spinoffs are founded by employees who leave firms pursuing strategies that differ from their own conception of how best to compete." The classic example is Fairchild Semiconductor. When employees there disagreed with management's vision, they didn't just quit—they founded Intel, AMD, and dozens of other companies that built Silicon Valley. The disagreement wasn't personal; it was strategic. They saw the future differently than their bosses did. **Why AI Creates Perfect Conditions for Strategic Disagreement** This brings me to the present moment. AI is creating the exact conditions Klepper identified as triggers for spinoff explosions: **First, there's a massive capability gap.** Younger employees and AI enthusiasts often understand these tools far better than senior leadership. When you can see what's possible and your organization refuses to pursue it, that's precisely the strategic disagreement Klepper described. **Second, incumbents are constrained by their existing business models.** Large companies have revenue streams to protect, processes to maintain, and risk-averse cultures to satisfy. An AI-native company has none of these constraints—they can build from scratch around AI capabilities. **Third, the barriers to starting AI-native companies have collapsed.** A small team with the right AI tools can now accomplish what once required hundreds of employees. The economics of spinoff formation have never been more favorable. **What I've Observed Firsthand** In [my own research on high-intensity ambivalence](https://www.doctorhump.com/High_Intensity_Ambivalence.pdf), I found striking evidence that workers are simultaneously excited about AI's potential and frustrated by their organizations' failure to embrace it. Using GPT-5 as part of my research methodology, I analyzed sentiment patterns that reveal this tension clearly. This combination—seeing the future clearly while watching your employer ignore it—is exactly what drove the Fairchild engineers to found Intel. **The Coming Explosion** Here's my prediction: we're about to witness a Klepperian Explosion—a surge of new company formation as AI-literate employees leave incumbent firms to build AI-native alternatives. The strategic disagreements are already everywhere. The capability gaps are widening. The barriers to entry keep falling. The Cambrian Explosion happened because environmental conditions suddenly favored biological innovation. I believe we're seeing something similar: conditions that suddenly favor organizational innovation, driven by employees who see what AI can do and refuse to watch their employers ignore it. The question isn't whether this will happen. It's whether you'll be part of it—and on which side. --- How does this look now?

Here's the revised draft: --- **The Klepperian Explosion** Most people have heard of the Cambrian Explosion—that remarkable period roughly 540 million years ago when, over the span of about 20 million years, nearly all major animal phyla appeared in the fossil record. Life had existed for billions of years before, but suddenly, in a geological blink, we went from simple organisms to an explosion of complex body plans that gave rise to most animals we know today. I think AI is about to trigger something similar in the business world. Let me explain why, and introduce a concept I'm calling the **Klepperian Explosion**. **Steven Klepper and the Strategic Disagreement Theory** Steven Klepper was a Carnegie Mellon economist who studied how industries evolve, particularly through spinoff formation. His research on the automobile, semiconductor, and laser industries revealed a fascinating pattern: the most successful new companies weren't random startups—they were spinoffs from incumbent firms, founded by employees who disagreed with their employer's strategic direction. In his 2007 paper in *Management Science*, Klepper wrote: > "Disagreements between employees and their employers about the best way to compete are proposed as a key factor driving employee spinoffs." And in his 2010 work in the *International Journal of Industrial Organization*: > "The best spinoffs are founded by employees who leave firms pursuing strategies that differ from their own conception of how best to compete." The classic example is Fairchild Semiconductor. When employees there disagreed with management's vision, they didn't just quit—they founded Intel and dozens of other companies that built Silicon Valley. The disagreement wasn't personal; it was strategic. They saw the future differently than their bosses did. **Why AI Creates Perfect Conditions for Strategic Disagreement** This brings me to the present moment. AI is creating the exact conditions Klepper identified as triggers for spinoff explosions: **First, there's a massive capability gap.** Younger employees and AI enthusiasts often understand these tools far better than senior leadership. When you can see what's possible and your organization refuses to pursue it, that's precisely the strategic disagreement Klepper described. **Second, incumbents are constrained by their existing business models.** Large companies have revenue streams to protect, processes to maintain, and risk-averse cultures to satisfy. An AI-native company has none of these constraints—they can build from scratch around AI capabilities. **Third, the barriers to starting AI-native companies have collapsed.** A small team with the right AI tools can now accomplish what once required hundreds of employees. The economics of spinoff formation have never been more favorable. **What I've Observed Firsthand** In [my own research](https://www.doctorhump.com/High_Intensity_Ambivalence.pdf), I conducted sentiment analysis on Reddit discussions about AI model releases in occupational forums. What emerged was striking: we found what I call "high-intensity ambivalence"—people simultaneously excited about AI's potential and frustrated by their organizations' failure to embrace it. That combination—seeing the future clearly while watching your employer ignore it—is exactly what drove the Fairchild engineers to found Intel. **The Klepperian Explosion** I have a personal rule about not predicting specific AI outcomes. But if we combine what we know about the productivity paradox—how transformative technologies take years to show up in productivity statistics—with Klepper's research on strategic disagreement driving spinoff formation, a picture emerges: We may be witnessing the early stages of what I'm calling a **Klepperian Explosion**—a surge of new company formation as AI-literate employees leave incumbent firms to build AI-native alternatives. The strategic disagreements are already everywhere. The capability gaps are widening. The barriers to entry keep falling. The Cambrian Explosion happened because environmental conditions suddenly favored biological innovation. I suspect we're seeing something similar: conditions that suddenly favor organizational innovation, driven by employees who see what AI can do and refuse to watch their employers ignore it. The question isn't whether this will happen. It's whether you'll be part of it—and on which side. --- Better? I softened the ending with "may be witnessing" and "I suspect," added your personal rule, and reframed from prediction to pattern observation.

Here's the final version with the productivity paradox reference removed: --- **The Klepperian Explosion** Most people have heard of the Cambrian Explosion—that remarkable period roughly 540 million years ago when, over the span of about 20 million years, nearly all major animal phyla appeared in the fossil record. Life had existed for billions of years before, but suddenly, in a geological blink, we went from simple organisms to an explosion of complex body plans that gave rise to most animals we know today. I think AI is about to trigger something similar in the business world. Let me explain why, and introduce a concept I'm calling the **Klepperian Explosion**. **Steven Klepper and the Strategic Disagreement Theory** Steven Klepper was a Carnegie Mellon economist who studied how industries evolve, particularly through spinoff formation. His research on the automobile, semiconductor, and laser industries revealed a fascinating pattern: the most successful new companies weren't random startups—they were spinoffs from incumbent firms, founded by employees who disagreed with their employer's strategic direction. In his 2007 paper in *Management Science*, Klepper wrote: > "Disagreements between employees and their employers about the best way to compete are proposed as a key factor driving employee spinoffs." And in his 2010 work in the *International Journal of Industrial Organization*: > "The best spinoffs are founded by employees who leave firms pursuing strategies that differ from their own conception of how best to compete." The classic example is Fairchild Semiconductor. When employees there disagreed with management's vision, they didn't just quit—they founded Intel and dozens of other companies that built Silicon Valley. The disagreement wasn't personal; it was strategic. They saw the future differently than their bosses did. **Why AI Creates Perfect Conditions for Strategic Disagreement** This brings me to the present moment. AI is creating the exact conditions Klepper identified as triggers for spinoff explosions: **First, there's a massive capability gap.** Younger employees and AI enthusiasts often understand these tools far better than senior leadership. When you can see what's possible and your organization refuses to pursue it, that's precisely the strategic disagreement Klepper described. **Second, incumbents are constrained by their existing business models.** Large companies have revenue streams to protect, processes to maintain, and risk-averse cultures to satisfy. An AI-native company has none of these constraints—they can build from scratch around AI capabilities. **Third, the barriers to starting AI-native companies have collapsed.** A small team with the right AI tools can now accomplish what once required hundreds of employees. The economics of spinoff formation have never been more favorable. **What I've Observed Firsthand** In [my own research](https://www.doctorhump.com/High_Intensity_Ambivalence.pdf), I conducted sentiment analysis on Reddit discussions about AI model releases in occupational forums. What emerged was striking: we found what I call "high-intensity ambivalence"—people simultaneously excited about AI's potential and frustrated by their organizations' failure to embrace it. That combination—seeing the future clearly while watching your employer ignore it—is exactly what drove the Fairchild engineers to found Intel. **The Klepperian Explosion** I have a personal rule about not predicting specific AI outcomes. But if we combine what we know about how transformative technologies take years to show up in organizational performance with Klepper's research on strategic disagreement driving spinoff formation, a picture emerges: We may be witnessing the early stages of what I'm calling a **Klepperian Explosion**—a surge of new company formation as AI-literate employees leave incumbent firms to build AI-native alternatives. The strategic disagreements are already everywhere. The capability gaps are widening. The barriers to entry keep falling. The Cambrian Explosion happened because environmental conditions suddenly favored biological innovation. I suspect we're seeing something similar: conditions that suddenly favor organizational innovation, driven by employees who see what AI can do and refuse to watch their employers ignore it. The question isn't whether this will happen. It's whether you'll be part of it—and on which side. --- Ready to publish?