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 service 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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