Podcast

Why American culture feels so chaotic – and how investors can benefit

June 2026 / 35 minutes

Key points

Entropy – the tendency for systems to fragment and become more unpredictable over time – has taken hold of US culture
It’s causing Americans to diverge over their interests and habits, affecting the prospects of businesses that serve them
Companies such as SharkNinja, Shopify and DraftKings are among those best suited to this more chaotic environment

View transcript

Capital at risk.   Leo Kelion (LK): November 2015. A&P’s last grocery store goes dark. A sign in the window thanks customers for 156 years. Rewind to 1930. That year, the Atlantic and Pacific Tea Company operated nearly 16,000 shops in North America. That made it the world’s biggest retailer, and it sold everything from fresh-cut pot roast to peanut butter. So what happened? The world got complicated. TV ads stoked demand for new brands, and Americans stopped buying A&P’s private-label products. They wanted choice. Maxwell House or Nescafé. Then 50 types of mustard, then organic, then ethnic. An endless appetite for novelty. While younger rivals focused on selection, A&P made its factories more efficient, optimising for the world that was, rather than the new complexity. It’s a story that’s been repeated across industries and time. Order gives way to entropy, and in the chaos, new winners rise. Welcome to Short Briefings on Long Term Thinking. I’m Leo Kelion, and I’m joined by Dave Bujnowski, Baillie Gifford partner and an investment manager in our US Equity Growth Team. In this episode, we’re going to discuss his paper, When systems fragment: entropy, cultural change and the next great US companies. But before we begin, a quick reminder, as with all investments, your capital is at risk, and your income is not guaranteed. Dave, welcome to the show. Dave Bujnowski (DB): Thanks, Leo. It’s a pleasure. LK: So, Dave, before we explore how entropy relates to growth, I’d like to reintroduce you to our audience because it’s the first time that you’ve been on the show in just over three years. And within Baillie Gifford, you’re known as one of our leading systems-level thinkers. So can you start by just explaining what that term means? DB: The best way is to contrast it against linear thinking. I think linear thinking is very sequential. If A happens, then B follows. System-level thinking appreciates that the world is made up of interconnected systems. And what is happening at the system level is more important than studying any individual component within it. So as an investor, I can study a business until I’m blue in the face, but its fate might ultimately be determined by the dynamics taking place in the system around it. So A happens, B follows, but then B feeds back into A, C is building in the background, and the big shift happens, coming from a place where nobody had expected. It consists of feedback loops and stocks and flows and all sorts of underappreciated and surprising dynamics. LK: And then, before joining Baillie Gifford, you co-founded a company of your own, Coburn Ventures, which specialises in understanding how change happens. So how did the work that you did there inform your approach to stock picking today? DB: Sure. I think it starts with the premise that change drives growth. A lot of people assume that for growth to happen in an enterprise, there must be expansionary forces taking shape around it. But in fact, all you need for a business to grow is a change to take place. Now, as far as Coburn Ventures go, full credit to my mentor and founder of Coburn Ventures, Pip Coburn. His investment philosophy was founded on identifying monumental change. And the idea was that humans are wired, and investors, as a subset of humans, are wired to think rather incrementally. Change doesn’t announce itself. It creeps up on you. And when a big change happens, it’s hard to identify. So our premise was, if we can understand when there’s a monumental change happening, we can place our investments accordingly and find the companies that are on the right side of that change. That was the core of our entire investment philosophy. Now, importantly, there’s different types of change, and this is what made it a fascinating, wonderful study. Some change I’d describe as happens on the micro level. A company introduces a new product, or Walmart changes its shelf space and gives an advantage to one company over the other, or a company restructures, and it alters the shape of their cash flows going forward. Those are investable changes, absolutely. But the implications of those changes are rather narrow in scope. Other changes are more macro. They’re at the system level. And when a system changes, the entire landscape reshuffles. The playing field is upended. Incumbents tend to lose, like in your introduction. That was a system-level change. And when I look back on the last century of investing, when you look at the largest market caps in the S&P on a decade-by-decade basis, all of them are tied to a system-level change. Going back to the transportation system being disrupted, and how that led decades later to stocks like Exxon and Shell, to the computing era, IBM, Intel, Microsoft, all the way up to the AI, post-World War II consumer boom in the United States, leading to companies like Walmart. So if it’s outliers you seek, like we do at Baillie Gifford, I think pointing our efforts at system-level change is a right way to spend our time. LK: So if we turn our attention specifically to entropy, entropy obviously helps scientists with thermodynamics understand heat dispersion. But how are you using the term entropy in the context of finance? DB: Before I even get to finance, I think it’s important to start at, again, the system level. So if I work from the premise that change drives growth opportunities, and if I work from the second premise that system-level change is what drives outlier-type exceptional growth companies, then it would stand to reason that spending my time studying change and studying systems, and importantly, what changes a system, what causes change to happen in a system, why and how it happens, would be a really good use of time. So I’ve spent a lot of my career doing that, and that has led me to the second law of thermodynamics. Now, as you mentioned, it typically describes how energy and heat disperses in a system, going from concentrated to more dispersed and more distributed. That is when it comes to thermodynamics. But it’s also a system. It’s a system dynamic. So applying what I’ve just done is take that same dynamic, transfer it over to different types of systems, and determine whether those systems are experiencing a similar type of dynamic. From concentrated to fragmented, from low entropy to high entropy. LK: And just to clarify, why focus on entropy rather than just change in general? DB: Some changes that take place in systems are fleeting. They’re not permanent. The system can revert back to its old shape. And if you invest behind the change that you observed, and it’s only a transient, temporary change, it might not lead to any long-term investment opportunity. But entropy suggests the change is structural and permanent. It will lead to a new order in the system and very likely new places where value accrues, new winners, new losers. LK: So was there a moment where it clicked for you, this idea of moving from centralised systems to fragmented, distributed ones, a kind of light bulb moment that everything fitted in place? DB: There was a meeting I was in where this started to really click and incentivised me to do more work around just understanding entropy. And that was with the CEO and founder of Cloudflare, Matthew Prince. He was describing the opportunity in front of Cloudflare. And to do so, he compared it to Google’s early efforts around search. And he pointed out that before Google dominated search, there were several other search engines. And AltaVista was one of the leaders. Now, AltaVista was the search engine created by Digital Equipment Corporation, a mainframe company. And AltaVista resided on DEC’s mainframes. Their big iron, it was a big iron play, and it was just their application for search. Google came at it with an entirely different architecture. They used commodity servers, fully distributed across a system, layered their own clever intelligence layer on top of those white-box commodity servers, and it proved to be far more powerful. Now there’s all sorts of other reasons why Google ended up winning, but they came at it with an entirely new software-defined architecture, and Matthew Prince described the opportunity for Cloudflare as being similar in the networking space. Now, he didn’t use the word entropy, but that anecdote kind of hit me over the head. And it just got me thinking, what other systems might be ripe for change if this force going from concentrated to fragmented is pervasive and almost a law of nature. LK: So that conversation with Matthew Prince got you thinking how fragmentation can lead some companies to rise and others to fall. I imagine for many investors, that might have been a leaping-off point to thinking about AI as an entropic force. You instead decided to focus on US culture. Why? DB: It was one focus. Certainly, AI is a focus as well. It deserves to be. But at the time, just right around that conversation with Matthew Prince, I was reading a book called The Scientist. It was a biography of EO Wilson, the naturalist biologist. He’s known by some as Darwin’s heir. And where he focused his career and where his insights were generated were directed towards insects, and specifically ants. And in the book, he talked about why. Now, when he was coming of age in university as a scientist, it was right at the time when Watson and Crick discovered the double helix. And he said, every scientist worth his weight in salt directed their efforts towards genomics. And Wilson thought, very rightly, that the likelihood of generating truly novel insights would be higher if he focused his attention on a place where no one else was looking. And so, ants, it was. And he turned out to have just an amazing, successful and accomplished career. That was one reason I thought, okay, this happened as just after the ChatGPT moment in 2022, when most investors, most technology investors, most growth investors directed their efforts towards AI. Again, for all the right reasons and something that we obviously do as well. But I thought with all that attention looking at AI, there don’t seem to be too many people studying culture. And culture is a system, and systems have a tendency to go from a low entropy to high entropy. Culture is a powerful system. It determines our habits, our shopping behaviour, our norms in society. Surely, there could be investment opportunities if that system is changing. That was one reason I turned my attention towards culture. The second reason was, as it happened, I re-engaged with an old friend, Grant McCracken, who is a cultural anthropologist in America. And we started working together on a weekly basis, just talking about the changes that he is witnessing. A recurring theme in these conversations was an observation that Grant had that American culture itself is fragmenting. That the trends in America that defined maybe the 1960s and 70s were fragmenting. And American culture itself was getting a bit more chaotic, a bit more random. And it sounded a lot like entropy. So we both leaned into this idea of treating American culture as a system, thinking about whether it was shifting to a higher-entropy state, and then as an investor, considering what the investment implications might be. LK: I think Dr McCracken came up with a metaphor. He compared it to the North Sea, and we can actually hear him, in his own words, explaining that. Grant McCracken (GM): North Sea culture is a metaphor we use to characterise the nature of change and dynamism in the present day. It gives us a chance to contrast what’s happening in the present day with what was happening after World War II. In that moment, there was plenty of change, God knows, but there was also something orderly about the way change would announce itself and install itself in western cultures. It was a little like standing on the beach at Waikiki in Hawaii, watching these beautiful rollers steaming into shore, treating those as trends on approach, so to speak. You could see them coming. You could see them coming a long way off. You could track them. You could predict them. You had plenty of warning. And that’s a world that is now long gone, and hence the North Sea culture metaphor. Because the North Sea is, of course, a very different place. It’s a place of tremendous commotion. It’s almost as if designed to create a place of tremendous instability where there’s so much commotion in the waters of the North Sea that it’s very hard for any one trend to seize the moment, to seize the day. And so what you get instead is a kind of continual pandemonium. So that’s what we’re after here. That’s sort of our marching orders is to figure out, okay, what models and what understandings do we need to shift in order to contend with change in the present day, to contend with change as produced by a North Sea. LK: So Dr McCracken paints a vivid picture of, in his own words, instability and pandemonium. But can you make this concrete for us and just explain how those forces have affected US culture? DB: I think one we can all relate to, if you’re from my generation, is around TV and video entertainment. When I was growing up in America, there were three TV stations, and that was it. It eventually became four. Then we got cable. It got into the hundreds. And now, if we want video entertainment, there’s an endless supply from YouTube to TikTok to Instagram, and so podcasts, and it just keeps expanding. So that is from concentrated video platforms to a higher entropy state. Similar dynamics held in religion. In the 1970s, more than 90 percent of Americans identified as Christian. I think that’s down into the low 60s. And the number of Americans who say they don’t have any religious affiliation has quadrupled in that time period. Fashion, I think in the early 60s, as my children would kind of say, like the olden days, if you look at photos from that era, it’s men in hats and flannel suits and women in dresses. Even the counterculture of the late 60s, there was a defined uniform. So even that wasn’t necessarily higher entropy, it was just a different uniform. And today, obviously the styles, it’s incredibly hyper-personalised. So almost everywhere I look, we see this shift in a system from lower entropy to higher entropy. LK: And then in your paper, you talk about the fact that this transformation is leading to new consumer behaviours, one of which you define as the decline of wellness. Can you just unpack that? Because that phrase is probably going to surprise some in our audience. DB: Yeah. Grant and I had a lot of fun talking about this. As Grant describes, in that lower entropy state in, let’s call it the 1960s, these Waikiki waves, these rolling waves that defined a trend. It wasn’t that culture wasn’t changing. It was just that the changes were predictable and orderly. And wellness was a very orderly cultural change. We can debate when it started brewing, but I always think of sort of the late 1980s Nike ads “Just do it.” There was a running craze that started in the 80s. It led into sort of the yoga, lululemon era of the early 2000s into fitness trackers and even how we eat. It was quite uniform. It was a unifying force that surely not everyone subscribed to. It’s not reversing because of entropy. And I want to make that clear. It’s fragmenting. It’s splintering. There is some rebellion against it. And Grant has, as an anthropologist, a lot of evidence of this, where people are just fatigued with the pressures of tracking yourself, and how I look on Instagram, and they’re rebelling against the wellness trend. Others, when I say it’s fragmenting, are taking that wellness trend and applying it more towards mental health. It’s almost a more stoic, rugged element of this trend. Think Joe Rogan, MMA and cold plunges. And even preparing for this conversation, there’s sort of offshoots of this wellness trend that pop up every other week. Some of them are memes. There’s delulu, which is sort of this optimism meme that has taken hold. It’s almost hard to keep track of them all. It all ties together with this breaking down of a very unifying Waikiki wave, low-entropy state into something much more fragmented. LK: So what does that mean for a company like lululemon? DB: Yeah, well, lululemon, its revenue growth is now decelerated into the low single digits, I believe. And I think its earnings may be negative year over year. And I think that’s happening for all sorts of reasons. They have competition coming in from some very powerful brands. Some of them that I think are speaking directly to some of these splinters. Brands like ALO will speak to a certain cohort. Brands like Vuori might have a little bit more of a male bend to them, whereas lululemon was just sort of this rising tide, this unifying force behind wellness. So you could point to competition, but lululemon has always had competition. So I think their difficulties right now, I think, beg the question, is there something else going on? And I think it is the North Sea dynamic that Grant talks about, the higher entropy state that wellness has succumbed to, that the unifying force that led to a very – homogeneous might be overstating it – but a large market opportunity all pointed in the same direction is now not pointing in that same direction. And it’s opening the opportunity up for different competitors and weakening the forces that were helping Lululemon. LK: So lululemon isn’t one of your portfolio companies. I want to spend our remaining time looking at how the entropy framework applies to the companies that you do hold and some of the signals that you look for as well. Let’s start with one of those signals, agility. Why is agility important in a high-entropy world, and can you point to a company that proves it? DB: Shopify springs to mind. I’ll read a quote in a second from its founder, Tobi Lütke. But the idea is that in a North Sea world, as Grant would call it, in a higher entropy state, there’s disruptions coming at you left, right and centre. Tobi acknowledges that in certain moments, in certain periods, you don’t need to be agile. But now we are in one where agility is key because you have to be nimble and not get swept away by some of these undercurrents in the North Sea. So I’ll read the quote. “The future belongs to the most adaptable companies. There are actually times when maybe that isn’t actually important. There are certain times when we know what we need to do. Let’s just go do it. But we are now in these times where there’s multiple tidal waves coming from all directions. New technologies emerging here. New ideas everywhere. And we kind of have to take it from zero budget and reinvent the company over and over.” And I just love that. He speaks, using another ocean metaphor with tidal waves. I can’t help but think of the North Sea and the tumult that Grant speaks to and that Tobi is speaking to. Exactly. And Tobi goes on to say that being founder-led helps you direct your company. You have more political capital as a founder to help you be nimble and help you navigate the rough seas. And that’s something that, as you know, we at Baillie Gifford lean into quite seriously, are these founder-led companies. LK: Let’s stick with Shopify because I know your team has had the privilege of spending substantial time with Tobi Lütke. And if I just take us back to that story I mentioned at the beginning of the podcast about A&P being caught out by changes in shopping habits, we can see another one coming on the horizon in agentic commerce. This is AI bots going out and doing at least some of the purchases on our behalf. How might that affect Shopify? DB: I think it might be tempting for some to assume AI is coming, it’s going to disrupt commerce. Shopify is in commerce. Shopify will get disrupted. I see it as just the opposite. And from a system point of view, what I base that thinking on is I’m reminded of, I think it came from Ben Thompson at Stratechery. He described, once how value shifts within a system. And he likened it to a balloon filled with air. And when you squeeze the balloon, the air doesn’t go away. It just shifts to a different part of the balloon. The internet is a great case study in this. If you think about commerce and retail, pre-internet, the value resided at the part of the food chain that consisted of who had the shelf space and who had distribution power. That’s why the big-box retailers dominated for decades. When the internet arrived, that shelf-space advantage disappeared because shelf space became infinite. It became commoditised. So value didn’t go away. It shifted to a different part of the value chain, that being traffic aggregation.And an entirely new crop of winners led by Amazon resided there. Coming back to your question and agentic commerce, what that means from a system point of view is the interface, the front door to where the shopping and where the commerce will happen changes. A bot will not care where it’s going to go. It’s just going to go find the product that you want. So if the value initially laid at the front door, the storefront, that may well be commoditized. But it just means that that air, the balloon air, gets squeezed into a different part of the structure of the system. And I think where it will get pushed is more in the orchestration of that transaction, dealing with fraud, dealing with checkout, dealing with payment, dealing with fulfilment, dealing with returns. And that is what Shopify provides for its merchants as the operating system that they use for their commerce needs. So I think it’ll be an accelerant for Shopify, not a disruptor for Shopify. LK: That’s fascinating. If I can move on, you also talk about fragmentation opening up niches and more space for subcultures, and that can benefit the companies serving them. Can you give me an example of one? DB: One of the things that we look for in an investment opportunity is the size of and the shape of the total addressable market – the TAM, right? And TAMs have tended to be defined in silos. And in a higher-entropy world, those silos are fragmenting. So I’ll bring it to life with an example. SharkNinja, it’s a home appliance company. It makes blenders, vacuum cleaners, a wide assortment of home appliances. And why I flagged it as a beneficiary of a higher-entropy culture is because it’s approaching the TAM I described. The TAMs in home appliances are blenders, vacuum cleaners. And the companies that exist in the system address each of those as if they’re homogeneous silos. You might have Dyson and vacuum cleaners. And SharkNinja was built with a completely different philosophy in mind. It doesn’t start from the segment vacuum cleaners. It starts from the end user. Empathy is baked into its culture. It identifies what consumers want, and it builds products in a very agile way to address those needs. So if you think about an appliance company addressing one homogeneous TAM, that was the old world. If it’s now in a higher entropy state, that homogeneous TAM is fragmented into all these little things. So if you’re SharkNinja, all of these little things represent white space in a way that an incumbent wouldn’t be able to address. So an example, they have a wildly popular home ice-cream maker. They identified a need that was not previously a segment. I mean, it was, but the entire segment, when they entered that space, was a $50m TAM. I don’t think any public company would bother trying to address a TAM that small. They saw a need, though, and they saw it as white space. And now just for SharkNinja, this is stale at this point, but a year ago, they would talk about how their ice-cream product itself was $150m category. So it’s tripled the size of the TAM that existed previously, because they saw a need, they saw a fragment and they built product for it. And they do that across many things beyond just ice-cream makers. LK: Not everything is changing, though, and I think you make the point that you look out for what you call ‘cultural anchors’, and that can point you towards long-term growth, too. Can you make that real with a company that does that? DB: Examples of this, the two that spring to mind, one, I would say, is more of like a societal anchor, and that’s sport. It’s still the place that has not succumbed to the fragmentation that has ripped apart so many other forms of entertainment. It’s still where we gather as a crowd in one place at the same time, synchronously. Doesn’t mean we can’t watch replays on YouTube later, but it’s where we get together. And that scarcity value can be seen in rising Super Bowl advertising rates that just go up every single year. To sports licensing rights, they keep going higher. To the popularity and just the energy around online sports gambling or the prediction markets. Those are all signs that this is an anchor that has not succumbed to this, and it’s getting more valuable. The second anchor is more business model related. And the idea here is there are certain platforms that have almost become infrastructure in society. They’re the pipes that the chaos sits on top of, and they’re not moving. So if I am Meta or I’m Amazon or I’m Shopify or I’m Netflix, it doesn’t bother me so much that the activity taking place on top of my platform is chaotic and unpredictable and changing. I just care that there’s activity, and I’m the platform underneath that’s serving tha,t and I can be a toll booth or I can charge subscriptions or higher ad rates because of it. LK: And just going back to that sports example you were giving, what’s the company that connects to that’s in your portfolio? DB: DraftKings. The online sports, shifting from bricks and mortar, going to casinos to bet, to now within arm’s length, has made it in America a mainstream activity. A place where people communicate, where people get together. They call it a megatrend, and I absolutely believe that to be the case. LK: And then one other type of company that you talk about in your paper is companies that ride the entropy and help others to manage it. You call them ‘antidotes’. Tell us about one of those. DB: I’ll point to Samsara. So there are some systems that are just not motivated to change. They have not changed yet. The world around them is changing, but they are, because of their makeup, just less motivated and more inert. So think of the world of physical operations. These are fleets. These are supply chains. These are airline companies. These are field workers. The world of physical operations, it hasn’t yet digitised like advertising or media or information systems have. But the world around them is getting more complex because of this higher-entropy state. Regulations are getting more complicated. Compliance. Inflation is making it more costly to run. So Samsara is an Internet of Things company that places sensors throughout these physical operations, gathers data, turns it into intelligence, allows these companies to be more nimble, to get more agile, to save money, to create better safety standards for their employees, to be more compliant and more efficient. So it’s not a direct beneficiary of entropy, but it’s helping customers adapt to a higher-entropy world. LK: Dave, I know there’s a lot more in the paper, and I do urge our listeners to read it in full. I’m just curious where you’re now turning your attention. What other types of systems change are you thinking about at the moment? DB: So two that come to mind are the financial system and the monetary system. And this has long been the domain of large institutions and government bodies. And the feedback loops that I think are loosening, and this will obviously not change overnight, but there are signs that the feedback loops are loosening. I think society is losing its trust in institutions. You have a whole generation now has grown up using digital technology for their finance needs. Regulations around cryptocurrency are loosening. So these are all signs, okay, let’s watch this. This is a big system that has been inert, that could be changing, and it’s well worth the attention. The second one is space. And for the entirety of human history, this has been, again, the domain of just governments and a handful of defence contractors. And now, thanks to SpaceX, the feedback loop that’s loosening while reducing the costs of space travel by 90 percent is a pretty big one. So this will have implications for, it’s almost mind-numbing to think about what could happen as that system changes from communication systems to datacentres in space. It boggles the mind, but that’s another one we’re obviously watching closely. LK: Dave, we’ve covered lots. I always like to end this podcast by asking my guests what book they’re reading or have recently finished to get a window into their wider influences. So what’s new on your bookshelf? DB: I’m going to cheat. I say that because this isn’t a recent read, but it’s one that I keep next to me at all times. I read it a few years ago. It’s called Thinking in Systems by Donella Meadows. She starts it by saying, like, good luck trying to predict what a system is going to do. Like, that’s kind of the whole point is that they’re so counterintuitive. Why, when a government increases taxes, doesn’t it solve the problem? Well, because there are a lot of other reasons behind the problem. The system doesn’t work the way you think it’s going to work. But there’s one section in the book where she identifies, I think, 15 leverage points in a system where it just helps you understand what the more powerful levers are, that if you are trying to either affect system change, or if you’re observing a system as an investor, to try to identify when a system will change, when it won’t change, what it might look like when it starts to change, you know which levers to focus on. And I’ve found it incredibly valuable. So it’s not my most recent read, but it’s the one that I turn back to on a weekly basis. LK: And I’m curious, when you’ve got those 15 levers, or indeed any of the frameworks that you’re using, do you use AI to help you find them in the companies that you research? DB: I have used her book and others to develop lenses that I would consider my best thinking of trying to generate an insight to understand how something as complex as a system might react to certain changes. So I’ve uploaded all of these different types of lenses into ChatGPT and Claude, and then have fun mapping different companies against it, different systems against it, helping it be my armchair system scientist, trying to understand what might happen next. It’s a lot of fun. LK: That’s really interesting. It feels like actually there might be a whole other podcast in discussing that. Maybe we can get you back on again soon. Dave, thank you very much for coming on the show. DB: Thanks, Leo. LK: And I hope you enjoyed this conversation, too. Dave’s article, which inspired this episode, is published as part of The Long View, an online collection of articles written by key decision makers on the US Equity Growth Team. You can find it at the Insights section of Baillie Gifford’s website, along with the write-ups of this and past Short Briefings episodes. Subscribe to the show via YouTube, Spotify or any podcast app to be the first to know when the next edition’s out, and we’d love it if you left us a comment or review. But for now, that’s it. Thanks for listening, and I look forward to briefing you again soon.   Important information The views expressed should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions. This communication was produced and approved in May 2026 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking. Potential for Profit and Loss All investment strategies have the potential for profit and loss, your or your clients’ capital may be at risk. Past performance is not a guide to future returns. This communication contains information on investments which does not constitute independent research. Accordingly, it is not subject to the protections afforded to independent research, but is classified as advertising under Art 68 of the Financial Services Act (‘FinSA’) and Baillie Gifford and its staff may have dealt in the investments concerned. All information is sourced from Baillie Gifford & Co and is current unless otherwise stated.  The images used in this communication are for illustrative purposes only. Baillie Gifford & Co and Baillie Gifford & Co Limited are authorised and regulated by the Financial Conduct Authority (FCA). Baillie Gifford & Co Limited is an Authorised Corporate Director of OEICs. Baillie Gifford Overseas Limited provides investment management and advisory services to non-UK Professional/Institutional clients only. Baillie Gifford Overseas Limited is wholly owned by Baillie Gifford & Co. 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What does the success of an ice-cream machine have to do with entropy and the US’s ‘splintering’ culture? Everything, suggests Dave Bujnowski, the latest guest of the Short Briefings on Long Term Thinking podcast.

He makes the case that Americans are living a more divergent existence – increasingly differing in how they work, shop and entertain themselves.

That can cause old business models to unravel. But for agile companies, better suited to the forces unleashed, the new conditions create long-term growth opportunities.

In SharkNinja’s case, it spotted a niche for its CREAMi kitchen gadget in households’ increasingly fragmented eating habits. Then social media influencers amplified its appeal by posting clips of recipes tailored to high-protein, sugar-free, dairy-free, vegan, gourmet, bodybuilding and even pet-food audiences.

In 2021, “when SharkNinja entered home ice-cream, the entire segment’s total addressable market [TAM] was valued at $50m”, explains Bujnowski, an investment manager in the US Equity Growth Team. “I don’t think any public company would bother trying to address a TAM that small. But SharkNinja saw that as white space.”

By 2024, management said CREAMi alone had grown into a $150m business. “It saw a need, it saw a fragment, and it built a product for it,” Bujnowski adds.

In other words, where home appliance rivals limit themselves to pursuing the vacuum-cleaner or blender markets – thinking about the world in terms of established silos – SharkNinja hunts for new gaps that households’ diverging wants and needs open up.

From order to chaos

The Massachusetts-based firm is just one of several holdings Bujnowski discusses in this episode dedicated to his paper, When systems fragment: entropy, cultural change and the next great US companies.

It centres on the idea that systems tend to move from order to chaos over time. Bujnowski partnered with the anthropologist Dr Grant McCracken to consider the US’s fracturing culture, in particular, and how the resulting tumult creates risks and opportunities for companies.

“After the second world war… there was plenty of change, God knows, but there was also something orderly about the way change would announce itself and install itself in western cultures,” McCracken explains.

Today it’s much harder “for any one trend to seize the moment, to seize the day, and so what you get instead is a kind of continual pandemonium,” he adds.

One reason for this is the move from three big TV networks dominating prime-time viewing in the 1950s-70s, to today, when hundreds of channels, Netflix, YouTube, TikTok and podcasts divide attention. Bujnowski points to shifts in the way we think about fashion as another.

“If you look at photos from the 1960s, it’s men in hats and flannel suits and women in dresses – even the counterculture had a defined uniform,” says Bujnowski. “Today, obviously, styles are incredibly hyper-personalised.”

That leads to new behaviours, the two suggest, one of which they define as the “decline of wellness”.

“Wellness was a very orderly cultural change,” Bujnowski says. “There was a running craze, which led into yoga and fitness trackers and how we eat.

“But today, some people are just fatigued with the pressures of tracking themselves and how they look on Instagram, and they’re rebelling against it,” says Bujnowski. “Others are taking that wellness trend and applying it more towards mental health, while other offshoots – MMA [mixed martial arts], cold plunges – seem to pop up every week.”

This poses challenges for fitness brands such as Nike and lululemon, he adds, which previously dominated, while opening the door for smaller upstarts to peel off some of the emerging cohorts.

How companies thrive in the disorder

While interesting, many of those upstarts are destined to remain small. By contrast, Bujnowski focuses on companies capable of achieving greater scale as entropy rises, and the qualities that set them apart.

“Agility is key,” Bujnowski says, adding that this gives founder-led businesses an advantage. Because they created the firm, he explains, they have “more political capital”, which in turn helps them win over staff and investors when they decide a pivot is required.

He gives Shopify’s chief executive as an example. Tobi Lütke sold the ecommerce platform’s logistics division in 2023, declaring that the firm needed to focus on “the AI era and the new capabilities” it would unlock. Most recently, that’s included building new tools and infrastructure to prepare for agentic commerce – bots that will make purchases on shoppers’ behalf.

“I’m reminded of a point tech analyst Ben Thompson made in his newsletter, Stratechery: when you squeeze a balloon, the air doesn’t go away,” Bujnowski says. “It just moves to a different part of the balloon. It’s a wonderful way to think of how value accrues and shifts throughout different parts of a system.”

If automated shopping takes off, he says, the way shop websites look might become less important, but store owners will still need someone to handle payment processing, fraud, fulfilment and customer returns.

“That’s what Shopify provides for merchants – the operating system they rely on.”

Another factor Bujnowski looks for is whether a company relates to a ‘cultural anchor’ – a tradition or behaviour that resists the entropic forces. He points to live sports as one example, one of the reasons his team holds DraftKings.

“Sports betting has shifted from brick-and-mortar casinos to online, putting it within arm’s reach, but still serving as a place to communicate and get together,” he says. “They call it a megatrend, and I absolutely believe that’s the case.”

A third characteristic on Bujnowski’s radar is whether a company serves as an ‘antidote’ to entropy. By this, he means firms that help others avoid getting caught out by the unpredictability that cultural disorder entails.

He gives the Internet of Things specialist Samsara as one example. “It places sensors throughout its clients’ physical operations, gathers data and turns it into intelligence,” he says. That helps them deal with new complexities as they arise.

Having mapped out the ways entropy applies to culture, Bujnowski is turning his attention to other forms of systems-level change. Among them are the ways digital finance is transforming traditional monetary systems, including the rise of crypto-assets, and the commercialisation of space.

“Until recently, space was the domain of governments and a handful of defence contractors,” he says.

“Now, thanks to SpaceX, that’s changing, reducing the costs of space travel by 90 percent. It boggles the mind, and it’s another systems-level change we’re watching closely.”

Dave Bujnowski, Investment Manager, Partner

Dave is an investment manager in the US Equity Growth Team. He joined Baillie Gifford in 2018 and became a partner in 2021. Before joining the firm, he co-founded Coburn Ventures in 2005. The company studies change to understand what shapes investment opportunities. Dave has also held various hedge fund roles. He began his career in 1996 at Warburg Dillon before joining UBS. Dave graduated from Boston College in 1993, where he majored in Finance and Philosophy.

Words by Leo Kelion

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Key points

From order to chaos

How companies thrive in the disorder

Risk factors

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