It is hard to understand exponential growth – this is why I published an Article about exponential growth. But fact is that a lot of things in our world are currently growing and changing in an exponential way. Computer chips and data are maybe one of the best examples for this. In 2017 there was more Information gathered then in the ten-thousands of years of human history before. But even its hard for the linear thinking human brain to grasp the extent of this change, we can try to adjust our thinking.
So in short we have to first understand the difference between growing in a linear or in an exponential way. The following picture explains it in a visual way how linear and exponential growth could look like.
But why should we even care about exponential growth that much? And why should businesses be worried about it as well?
The answer is pretty simple, because if you are missing out on it, it can have devastating implications for businesses. We see a world where the power lies in information, gathering, analyzing but also application of that knowledge gathered from this data. We are more and more dependent on the development of technology and platforms and digital ecosystems are all built around exponential growth. Even start-ups always want to see this so called “hockey stick” curve as this is one of the most demanded business models around – exponential business.
We can also rephrase the exponential business into another term – Scalability – and this scalability is key in understanding the difference between linear and exponential. If you have digital business models you usually just see a linear change in costs (e.g. more developers, more office space etc.) but on the other hand and additional customer might not even cost you anything. That means while having almost stable costs you can grow your customers and revenues without creating further costs. These business models are exceptionally interesting for everyone as this allows for easier expansion, better ROIs and also to leverage the outcomes of good ideas.
Change is the only constant and we have to embrace this change in order to keep up with the fast changing world of technology and business. It’s now time to think in exponential terms and think outside of the old industry linear way of doing things.
The original article appeared on MoreThanDigital.info – Exponential Change due to Exponential Growth