Exponential Growth

Exponential growth is a simple and powerful idea. A good way to learn about it is to watch this series of videos.

While the gentleman in the videos focuses on population growth and energy resources, you can use the basics you glean from the first couple of videos to apply the principles of exponential growth to any aspect of planning your business.

To summarise, if something increases by 7% per unit time (per day, per week, per month, per year, per decade), it will double (in quantity or size) in 10 time units. For example, if your site traffic increases by 7% each month, it will double in 10 months. And to take an example from the videos, if the world’s energy consumption increases by 7% every year, it will DOUBLE in 10 years.

We’re short of energy as it is. 7% may seem like a miniscule increase (or a healthy increase, depending on which way you look at it) but it has a massive impact in the long-run. That’s exponential growth for you.

A more general formula would be to take any rate of growth divide 70 by that rate of growth to know the ‘doubling time’ (number of years or months it would take for it to be twice in number).

A 1% growth rate – common for many countries’ population growth – leads to doubling in 70 years. A 2% growth rate doubles in 35 years.

When you apply this to big numbers and to global problems (energy consumption, spending, inflation, population growth, economic growth, etc) it starts to show how sustainable growth at even a smallish rate can cause a lot of growth over time. Apply to this to everyday problems and you’ll see the advantages of a steady approach over trying to get everything done overnight.

What are you going to use it for?

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