In Bold: How to Go Big, Create Wealth and Impact the World, Peter H. Diamandis and Steven Kotler have much of value to share on the subject of exponential thinking. That is, think in terms of compounding or doubling (1, 2, 4, 8, 16, and 32) rather than sequencing (1, 2, 3 4, 5, etc.) If you take 30 linear steps, you will travel 90 feet; if you take 30 exponential steps from the same starting point, you will travel about a billion feet. Never underestimate the potential power of exponentials.
In their book, Diamandis and Kotler offer what they characterize as “a framework called the Six Ds of Exponentials. “These Six Ds are a chain reaction of technological progression, a road map of rapid development that always leads to enormous upheaval and opportunity.”
Here they are:
Digitization: “This idea starts with the fact that culture makes progress cumu8latuve. Innovation occurs as humans share and exchange ideas. I build on your idea; you build on mine.” Today, anything that can be digitized (i.e. represented by ones and zeros) can spread at the speed of light or at least the speed of the Internet.
Deception: “What follows digitization is deception, a period during which exponential growth goes mostly unnoticed. This happens because the doubling of small numbers produces results so minuscule they are often mistaken for the plodder’s progress of linear growth.” It is at this stage that exponential growth, initially deceptive, starts becoming visibly, perhaps conspicuously disruptive and, to some, threatening.
Disruption: In simple terms, “a disruptive technology is any innovation that creates a new market and disrupts an existing one. Unfortunately, as disruption always follows deception, the original technological threat seems laughably insignificant.” We live in an exponential era. “Either disrupt yourself or be disrupted by someone else.”
Demonetization: “This means the removal of money from the equation.” As Chris Anderson suggests in Free, in today’s economy, one of the easiest ways to make money is to give stuff away. “Skype demonetized long-distance telephony; Craigslist demonetized classified advertising; Napster demonetized the music business…because demonization is also deceptive, almost no one within those industries was prepared for such radical change.”
Dematerialization: “While Demonetization describes the vanishing of the money once paid for goods and services, dematerialization is about the vanishing of the good and services themselves.” It is noteworthy that all the 1980s luxury technologies have since been dematerialized and now come standard with a smartphone. Thirty years ago, these devices would have probably cost hundreds of thousands of dollars; to day they come free or as apps on a smartphone. “And smartphones are the fastest-spreading technology in humanity’s history.”
Democratization: “Obviously, this chain of vanishing returns has to end somewhere. Sure, film and cameras now come free with smart phones, but there are still the hard costs of the phone with which to contend.” I agree with Diamandis and Kotler that democratization is the end of the exponential chain reaction, the logical result of demonetization and dematerialization. “It is what happens when physical objects are turned into bits and then hosted on a digital platform in such high volume that their price approaches zero.”
Diamandis and Kotler discuss all this and a great deal more in Chapter One, “Goodbye, Linear Thinking…Hello Exponential,” Pages 3-22.
I also highly recommend Exponential Organizations: Why new organizations are ten times better, faster, and cheaper than yours (and what to do about it), co-authored by Salim Ismail, Michael S. Malone, and Yuri van Geest. Please click here to check out my review of it.