2023-11-20
The idea of compounding might not come naturally to everyone, but it's a crucial concept. We often think that the effort we put in equals the reward we get, but that's not always the case. For instance, if a student studies only half the material for an exam while others cover the entire material, they might not just get half the grade—they could fail altogether. Similarly, if a company's product is only half as good, it might not get half the customers; it might get none at all. We usually encounter exponential or superlinear outcomes in money matters, like compound interest in school, but this concept actually applies broadly across many areas if you take a closer look.
In business, attending networking events or consistently writing blog posts over time are good examples. Learning istself works as a form of compounding, the more you learn the easier it gets. It's not just about what happens right away but about steady progress and enhancement. At the start, you might not notice much, but every effort you invest accumulates and becomes clear in the long run.
In areas where such returns are common, like sports, investing, arts, or politics, a few stand out significantly from the rest. To use this concept, certain elements are crucial: curiosity, risk-taking, and pursuing work that could result in exponential growth or breakthroughs. Novelty and luck also play roles, with novelty often arising from deep interests and attentive exploration.
Thanks,
Finn