Growth - Random vs Compound
July 11, 2023
By Mohammed Afzal
What people call success is sometimes randomness and often times a compound of failures.
There are two types of growth, one that lasts and the other that fades. Compound is the one that lasts and random is the one that fades. If we zoom out the whole world is nothing but randomness and probability. So what exactly is the random vs compound growth I’m talking about? To dig further let’s proceed with a vague example:
There are two businessmen in the same business, Businessman A has been in the business for a very long time and after struggling for a long time with almost no sales he is now doing good and his growth is no more stagnant. Businessman B just got started but got a boost in sales as he hired some influencers to promote his product, but his sales dropped after some time and are now close to zero.
Their graph looks something like this:
Reason: Businessman B is inexperienced in the field and doesn’t understand the economics of that market compared to Businessman A. So it doesn’t matter if he got a boost in sales, as he doesn’t know how to retain customers. On the other hand, Businessman A has been in the game for a long time and has tasted the mud, he is not only very experienced but also has loyal customers that trust him and keep referring others to him.
At the start, I said the whole world is nothing but randomness and probability, but by staying in the game for too long and shooting too many shots you make yourself a pie out of the randomness. At last, don’t get distracted by random growth, focus on compound growth which is non-linear and exponential most of the time, so be patient and committed because that is the true growth that lasts.
Thank you!
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