Can Exponential Growth Be Engineered

This is the key question for business owners trying to carve a path to fast success. When exponential growth has been experienced in the marketplace, companies grow very large (and very rich) much quicker than their linear counterparts. However, learning from the techniques and methods adopted by those companies isn’t enough on its own to apply them to your business. Every organization is unique, so what worked for them won’t necessarily work for you.

Yet exponential growth is around us all the time, and always has been, because it is a force of nature.  But it has never been more evident than in the past 30 years or so.

In 1965 Gordon Moore, one of the founding partners of Intel, observed that the number of transistors on a single computer chip had been doubling approximately every two years (growing exponentially), while the cost of production had been remaining static, or even reducing. He concluded that this trend would continue indefinitely.

His prophesy became known as Moore’s Law and it has held true for almost half a century, with little sign of abating for another decade or so.

This technological advancement is happening so fast that we can experience the effect of it in a very short space of time. The computer I’m using to write this with, for example, is two years old and already a quarter as powerful as one I could buy today for less money.

Remember when mobile phones where prohibitively expensive? – when only people who had to have them, had them… when people used to say “I’ll never have a mobile phone, why would I need one…”.  Remember that?  As I write, it was but 12 years ago, and yet now there is barely anyone above the age of fifteen who doesn’t have a mobile phone.

Technology is the broad term we use to describe the methods and inventions which make our lives more comfortable. We have been driving it since time began. Or rather, our evolution has been driving it.

The stone age lasted more than 10,000 years. For hundreds of generations, there was very little noticeable evidence of advancements in technology. All they had was stone, sharp edges, and fire. That was the first technology, and since then, it has been evolving in a parallel space alongside human biological evolution.

With the Iron age came more effective tools. Armed with these, we were able to speed up the process of providing shelter and food.

Next came the first farmers in an age when agriculture displaced hunter-gatherer economies, and later still came an Industrial age, when we discovered ways of using ancient deposits like coal and oil, to power machines that could automate the work for us.

The interesting thing about these ages, is that they each lasted less time than the previous one.

So in other words, the rate of technological development is getting faster. In fact, these days it takes us a single year to make the same advancement in technology that would have taken approximately 250 years in the Industrial age, and 25,000 years in the stone age.

For technology therefore, the rate of exponential growth is growing exponentially…

Can Moore’s Law really continue for ever?  There’s a limit to how small a chip can get, and  how many transistors it can carry.  When chips are down to the size of an atom, and laden with a billion transistors, perhaps then it will end. And by then, there will be something else, something even faster, to replace it. Have you heard of nano-technology? Its very much in its infancy now. Its what happens when machines are making machines, and we can expect it to be mainstream by 2020 or so.

As technology quickens, so companies grow bigger, faster. It is no coincidence that the fastest growing companies are all technology and information businesses, or those who supply them.

Lets consider the length of time it has taken businesses to grow in the last hundred years.
With increasing velocity, each of the companies below, reached net capital of $1Billion.

Time taken to reach net cap of $1bn

General Motors: 40 years
IBM: 20 years
Microsoft: 10 years
Google: 5 years

Does it make you wonder what will be next? It’s too late for Facebook, founded in 2004. Even Twitter isn’t monetized effectively enough yet to be capitalized at £1Bn, although it might sell for that much soon. Whatever it is, it will have to net $1Bn within two and a half years. Something which, until very recently, might have been considered as unattainable as travelling at the speed of light. My guess is, it either hasn’t been started yet or it is still relatively unknown.

Here’s a fact: Technology feeds off information and vice versa.

Got any views on which company will reach net cap of $1Bn within 2.5 years?

Let me know with a comment below.