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Jan 9th, 2020

The One Percent-Rule

Today, my colleague Mafe sent me an excerpt from an article she read:

”We can call this The 1 Percent Rule. The 1 Percent Rule states that over time the majority of the rewards in a given field will accumulate to the people, teams, and organizations that maintain a 1 percent advantage over the alternatives. You don’t need to be twice as good to get twice the results. You just need to be slightly better.”

It reminded me of a story I used to reference in one of my talks: The spectacular win of the British cycling team at the 2012 Olympics (see: “Marginal gains underpin Team GB dominance”).

In my eyes this is an important and rather unintuitive concept – and we are fraud with biases which prevent us from easily assimilating it. The way many of us see the world, and the way the world is reflected back to us (for example in the media) is one where heroic efforts lead to outlandish results: Unicorn-level startups are not the result of careful, constant and long-term compounded growth. No; they burst into the world due to the superhuman efforts, sleepless nights and breakthroughs being put forth by a superstar team.

I don’t think this is true. And even if it is, it is not sustainable and surely not the way you build something which lasts and wins in the long run.

Instead of trying to leap 10x you might want to think about how you can improve all your systems by 1%. And then another 1%, and another.

Never underestimate the power of exponential/compounded growth.

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