Exponential growth is one of the biggest opportunities… and threats to business today.
If you’re running a business in the technology sector, exponential growth is the type of thing that happens when your market hits the tipping point and the growth ratchets up from there in a way that could have never been estimated by the analysts (take, for instance, the growth of tablets). Ray Kurzweil once defined exponential growth in an easy to understand way. He said that as human beings were trying to map the human genome, it took a long time for us to arrive at the point where we had mapped one percent of the human genome. Once we arrived at one percent, we were basically at 95%. The point being that the first percent is the hard part, but once that hurdle was jumped, the rest just flows with that hockey stick type of growth curve on a graph, but that human beings don’t have the capacity to understand and quantify this exponential growth. Meaning, it always surprises us.
Surprise. Surprise. Surprise.
We’re seeing a lot of exponential growth in business and it’s not just coming from tech companies. We’re seeing companies come out of nowhere and have meteoric rise. Sometimes it leaves a wake. And, because of this moment that I have defined as "purgatory" (a central theme in my upcoming business book, CTRL ALT Delete), it also can cause massive sinkholes in businesses that we once assumed were protected. The news today is very grim for the PC business. The personal computing market is imploding at an exponential pace, and it’s something that has taken even the technology analysts by surprise. This graph titled, The PC Industry Implodes Before Our Eyes (published yesterday on Business Insider), tells the tale. From the news item: "It’s ugly out there for the traditional PC makers. IDC says PC sales fell 14 percent in the first quarter on a year-over-year basis. That’s worse than its forecast of a 7.7 percent drop. This is the worst quarter for PC industry since 1994 when IDC started tracking sales. So, that pretty much makes it the worst quarter in history." The fingers are being pointed at everything from growth in tablet and smartphone markets to the lackluster Windows 8 operating system reception by consumers.
The post PC world.
The reality of exponential growth – and what it does to the industries that are affected – is that even with this raw information, human beings reject it, ignore it or dismiss it as hyperbole. They’ll think that the numbers are exaggerated or that the "average American" still uses a PC and that we’re a long ways away from it being abandoned. And that, my dear business colleagues, is how we quickly do ourselves in and fail to grasp the ramifications of exponential growth. We try to retrench instead of innovate. We attempt to discredit the data by looking at the market of one. We think that the speed of change will be much slower than these analysts are telling us.
Movements not trends.
Moving forward, it may be wise to worry less about trends and pay more attention to movements. Trends are the types of stories that look at year-on-year growth by analysts in a linear fashion. It’s the type of news item that states that product X is expected to grow X percent over the next year. Instead, look at movements. This news about the PC industry is not a trend so much as it is a documentation of what has already happened. Pay less attention to forward-looking statements but pay a ton of attention to the data that tells us what has already happened. The news about the PC is something that took even the experts by surprise and it’s something that will – without question – lead to a massive shift in how we operate. If the personal computer business is imploding, this means that how we work and what we do will radically change as well.
It’s something to think about. Deeply.