Linear vs exponential

My electrician wanted to talk to me. He read the blog, "Why you shouldn't get into business" and wanted to discuss it.

I agree with most everything you said with one exception:
If I do 50% of the work of my competitor won't I get 50% of the results of him as well?

He stumped me. I didn't have an answer on the spot so I promised him I would think about it.

The quick answer is No.
The reason is exponentiality.

First off, assuming you work every week for 40 hours, but your competitor works 80 hours. In the competition race, he already has years of experience ahead of you. So working half the hours allows him to keep going further than you.  You can't catch him. He's more experienced, faster and gets more done in a week. Now if you're starting from the same place and you work half as hard as he does, you will always be halfway behind him.

This is a linear example. Like I said it's not a linear problem.

Let's use an example from the finance community to prove my point. If we save 1 cent per day, and the total amount saved doubles every day, how much money will we have in 30 days. The answer is $5,368,709.12.

If you save a half cent and instead of doubling every day, it only increases by 50%, do you know how much money you will have in 30 days? $1,775.47.

Even if we start from the same place, i.e. a penny saved with only 50% increases per day, the amount of money saved is $5,918.24.

Business results are not linear. They are exponential. The small daily efforts seem small in the beginning. It takes maximum effort every day. Over time, those efforts done consistently compound to pay off big time.

That is why working at half pace yields very little results.

The resulting difference isn't half. It's like a tenth of one percent.

The same thing happens with marketing efforts. Most business know they need to spend money in marketing, but they go in and out of the market. They try a tactic. Then they stop because it "didn't work". They try another tactic. Again, they stop complaining about it not working. They never allow the power of compounding to help them.

The other scenario I see with marketing is customers will do 100% of the work and quit before the huge payoff.  Imagine my first example on exponentiality. 20 days of hard work yields small results. It's the last five days that makes us millionaires beyond our wildest dreams.

If you save a penny per day, and the total amount saved doubles every day:
after 15 days you will only have $163.84;
after 20 days you will only have $5,242.88;
after 25 days you will only have $167,772.16.

Hope that answers your question. Thanks for asking.

If you want to get exponential results from your marketing efforts, you can reach me at ricknicholson@wizardacademy.com.