Systems thinking 101

I constantly ride on the border of abstract concepts and practicality. Concepts give me ideas, applying them shows me if they work.

It's easy to make concepts seem complicated because often they are, and it's hard to bring people back to what they should actually do with them. Simultaneously, obsessing over practical advice leaves no room for stringing actions together, no room for strategy and seeing the bigger picture. The goal is to zoom in and out as at your leisure.

Systems Thinking is one of the concepts that impacted my thinking about Growth and SEO. It helps me see patterns. Patterns help me see scale. Scale helps me see strategy. So, when applying systems thinking to Growth, it's almost like your piecing the smallest bricks together so you can see the house as a whole and then figure out how to build it better. You can't see that when you only focus on the bricks.

What is Systems Thinking?

Systems Thinking, also called Cybernetics, is the art of understanding feedback loops and leverage points within a system. When you get it, Systems Thinking is a beautiful tool for better decision-making.

Our lives are made up of systems: the economy, our bodies, the environment, Google Search Results. Every system has agents that interact with each other. A system like Google Ads, for example, has bidders that try to outbid each other on one side and users who click on an ad on the other side. The more bids on a keyword, the higher the price. But at some point, the price caps because the bidders won't be ready to pay more. It could be that CAC (customers acquisition cost) has exceeded LTV (customer lifetime value), so they stop bidding. But one of them will come out on top and win the bid.

In the diagram above, there is a simple feedback loop between the bid and price (black) that's connected to a smaller feedback loop (blue), which moves slower but ultimately caps the price. The full systems theory behind Google Ads is much more complicated, but this simple example helps us understand that there are driving and limiting agents.

One important question of Systems Thinking is how strong each agent is. To stick with our example, we could think about how business models impact search results regarding paid search. Some sites use arbitrage models: they buy traffic for a certain price and refer it to the highest bidder. At G2, that was never an option for us because we wanted to build an objective marketplace instead of a platform on which you pay for traffic.

What distinguishes systems from structures

In "Introduction to systems thinking", Daniel H. Kim describes systems as "any group of interacting, interrelated, or interdependent parts that form a complex and unified whole that has a specific purpose. The key thing to remember is that all the parts are inter- related and interdependent in some way. Without such interdependencies, we have just a collection of parts, not a system."

Systems have

• goals
• order
• Input & output
• boundaries
• surroundings

You can understand a system when you understand its purpose. Google's purpose, for example, is to "organize the world's information and make it universally accessible and useful." Every agent in the Google Search system strives toward that mission. In the context of Google (Organic) Search, the input is a query, and the output a list of results. The output changes based on feedback like users rephrasing their search or clicking on a result, coming back to the search results page, and clicking another result. The process from input to output has a clear and fixed order: crawling, rendering, indexing, ranking. The system's boundaries are computer and the internet, and it's surrounded by social networks, websites, and all sorts of software.

Systems change and adapt, too. There are different types of systems and subsystems: deterministic systems (goal is known) and open systems (interact with other systems). Google Search, for example, is a complex adaptive system. It's a whole network of systems and interactions that's hard, if not impossible, to predict because it changes with its environment. That's why I often compare Google Search to Poker, Investing, or medical research.

Applying systems

The theory of systems comes to life when we need to solve problems, whether "I want to rank for this group of keywords" or "how can I grow my company to $100M ARR?" The starting point is to write down all factors (agents) involved in the problem and then ask yourself a list of questions to get closer to the solution or at least a testable hypothesis:

1. Consequences: what are the 1st, 2nd, 3rd order consequences?
2. Horizontal vs. lateral thinking: what's related vs. what is a consequence?
3. Micro vs. macro picture: how does this look in detail vs. when taking a step back?
4. Relationships and dependencies: How are the parts connected?
5. First principles: what's the smallest building stone?
6. Sequences vs. loops: is the system self-sustaining or is there a beginning and an end?

Systems Thinking can help you clarify the problem, which, in return, creates solutions. Simple loop diagrams or drawings can go a long way, not just for yourself but also for communicating the problem with others.

Systems in SEO

Systems Thinking helps us understand that all things change in SEO. The bar for content gets higher because everybody produces content. The bar for backlinks gets higher because everybody wants them, which means those that can give them become aware of their power, and Google punishes aggressive link building. The importance of UX grows because information to a certain degree is a commodity, and the one who presents it the clearest and nicest wins.

These trends happen on large scale but impact our decision-making day-to-day. They explain why certain tactics don't work anymore, why SEO becomes more expensive over time, and why sites can lose a lot of traffic after years of stability. They're part of a system that constantly evolves.