becomes an ExO, one should begin by looking at the Law of Accelerating Returns, as defined by futurist, Ray Kurtzweil.
He states that the basic measure of information technology follows an exponential( and predictable) trajectory. Obviously this flies in the face of the idea that the future cannot be predicted. Many aspects of the business world( and whether a given business will fail or succeed) are still unpredictable, but through the prediction of the trajectory of information technology, a number of aspects can, in fact, be predicted.
Kurtzweil has made a name for himself as a futurist through a number of predictions he has made regarding the advancement of technology. One of these is that a computer would eventually be able to defeat a human in a game of chess. Another is that we would eventually have self-driving cars( thanks, Google). The genius of the predictions, however, are not the predictions. The genius of the predictions are the law that governs them.
His law of exponential growth in information technology is remarkably similar to Moore’ s Law, which states that“ the number of transistors incorporated in a chip will approximately double every 24 months”. The law, named for Gordon Moore, cofounder of Intel, was first stated in 1965. It remains true to this day. The law has seen computers go from the size of a room in a house down to the size of a phone that can fit into your pocket, while processing power has increased right along with the change in size.
In the context of business, you can extrapolate that once a business is able to leverage information technology in its processes and begins to acquire information, the growth pattern of that business will begin to double. Once that process starts it doesn’ t stop. That is the seed from which ExO’ s are born. According to Peter Diamondis, author of“ Abundance”, once we are able to harness that power, we will have abundance in everything. Linear vs. Exponential Growth
It is important to understand the difference between linear and exponential growth as well. Linear growth, as you would expect, follows a straight line. It is a constant growth that continually increases at the same rate. 1 + 1 = 2 + 1 = 3 + 1 = 4 … and so on. Exponential growth, on the other hand, grows at a proportion that is relative to the current value. 1 x 2 = 2 x 2 = 4 x 2 = 8 x 2 = 16 x 2 = 32 … and so on. The curves, as you can see below, look very different. One interesting thing to note about ExO’ s, in particular, is that when exponential growth is occurring in a field, the experts in that field almost universally predict linear growth.
As you can see, there is a big difference in the growth curves between linear and exponential( fig. 1). This is a key thing to understand. Once a company reaches a point of exponential growth, they are no longer going to be limited by a stagnant( yet constant) growth pattern. The Concept of Leverage
Leverage, as a concept, is something all of us understand. What many of us, and many businesses, fail to see, however, is how to leverage situations( or technologies) to change our positions in society or the marketplace.
LEVERAGING EXISTING RESOURCES AND APPLYING INFORMATION TECHNOLOGY TO INDUSTRIES HAS LED TO MAJOR UPHEAVALS IN MANY INDUSTRIES IN THE LAST DECADE.
The classic cycle of disruption, over time, in any given industry follows a pattern: overconfidence leads to a sudden collapse, the response to which is often“ too little too late” and is followed by a continual decline.
One of the most well known examples of this is, perhaps, the hotel industry. AirBnB has been able to leverage an existing resource( the homes, living spaces, and empty rooms of users) in order to provide a service to individuals looking for a quick and easy place to stay. Their overhead cost for this? Next to nothing. Whereas a hotel would require new infrastructure, years of construction,
Figure 1 linear vs. exponential growth curves
and ongoing maintenance costs, AirBnB can add a new room by simply acquiring a new individual looking to rent a space out on their service.
Another example is Uber. This one is almost textbook. You have taxi companies, which have stood largely unchanged for the last hundred years on one side, and you have a( once) small company leveraging( again) an existing resource( the cars of their clients) on the other. What happens? Uber provides a higher quality services for much less overhead with an exponential rate of growth.
Perhaps the most popular example, however, is Netflix. Almost single handedly, Netflix has changed the way we look at movies and media. Through the implementation of a standard, easy to operate, streaming platform, Netflix has become a service that is in nearly every household. Their process has been highly democratic and information driven right from the very start. For one thing, they constantly analyze the viewing patterns of each individual, customizing accounts
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