Exponential Growth, Exponential World — Part II: The Framework
These are Silicon Valley stories that will help you to re-frame your perspectives about the mission that drives you or your company.
To start this story, I need you to know some important concepts that Singularity University uses, starting with the Law of Accelerating Returns.
Law of Accelerating Returns
This is one of the core principles of Singularity University. In the book The age of Spiritual Machines by Ray Kurzweil, there is an interesting line that supports this paradigm,
The rate of change in a wide variety of evolutionary systems (including but not limited to the growth of technologies) tends to increase exponentially.
We never think exponential in our daily lives, so it is hard for us to interpret anything that follows that kind of function. Picking up the simplest example: look down the hall and think about walking 30 big steps. You can visualize yourself after those 30 steps, you would probably end up in another room or the other side of the office. Now, try to picture yourself walking 30 exponential steps. Hard to do, right? You would have walked, more or less, 25 times around the world.
Why is this important? Because,
The greatest shortcoming of the human race is our inability to understand the exponential function. Albert Allen Bartlett
But this is not just an idea of scientists. In Ernest Hemingway’s 1926 novel, The Sun Also Rises, the following dialogue is presented to us,
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
And in Economics, how do we perceive things? The prominent macroeconomist Rudiger Dornbusch enjoyed saying this line over and over again (e.g. about Mexico’s economic crisis in the 1990s):
The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.
And of course in technology, we have Amara’s Law, former president of the US-based Institute for the Future, that stated,
We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.
All of these different perspectives help us understand that this concept is much more closer to us than we normally see it. Nevertheless, we also saw the need to adapt our way of thinking, because we don’t think exponentially, we think linearly.
To shift from a linear to an exponential mindset we need to jump to psychology.
The law of completion is part of a series of ideas from Gestalt psychology. These ideas were first grasped in the 1920s, where a group of German experimental psychologists was addressing the way we piece together chaotic, unpredictable inputs to form meaningful perceptions.
It resulted in a group of principles to support how the mind self-organizes to form a global whole. In the famous words of Gestalt psychologist Kurt Koffka, our perception forms a whole that’s “something else than the sum of its parts.” Not greater than, just different.
Hype Cycle is graphic representation of emerging technologies developed by Gartner, that provides a graphical representation of the maturity and adoption of technologies and applications. It helps us project their potential relevance to solve real business problems and explore new opportunities.
The figure below shows the last year’s Hype Cycle. A good exercise to do is to check if your business is somehow developing, using or considering the usage of any of the presented technologies.
Why is this important?
The hype cycle that I showed previously is an approximation, so let’s take a step back. The truth is that all of these emerging technologies should be represented by a different curve and each curve can have a different period (extend more or less, depending on the technology speed of development — see the different shapes used in figure 2).
The real representation is showed in figure 3, where you can see the challenge to really capture all of these different dimensions and only 4 different technologies are schematically represented.
The main idea behind all of this breakdown is the following: technology comes in waves. Now that you are aware of this, you can see them way before they happen, and you just have to choose wisely which ones you’re going to surf. If you choose unwisely you will waste a lot of energy, but if you choose wisely, it unfolds before you.
Let’s merge this idea with the Law of Accelerating Returns. In the past we would be surfing these waves for several years, meaning that the plateau of productivity would be reached on this scale of time — years. But as we saw previously, there is a substantial difference between linear and exponential functions. If we apply it to innovation, we can see the reduction in cycle times— 12 to 18 months, today. At the same time, there are much more waves in the horizon, as the number of fields of research is increasing.
Now, let’s connect all three concepts together, adding Gestalt to our journey. Gestalt as we saw is the moment where we put together all the different chaotic, unpredictable inputs into one whole perspective. As you can see below, in the figure 5, a new line was added to the hype cycle graph. This yellow line represents the actual R&D curve of the technology.
To surf these new technologies we need to understand very well the hype cycle but also the development stages of the technology itself. The hype will kick in early, nevertheless there is not enough critical mass to bring real solutions to market, that is why this stage is highly disconnected from the market needs. There is a moment where market and technology will cross lines and that is Gestalt. Everything will make sense at that point so the number of applications will explode.
The world is not linear, it is exponential. We, humans, are not prepared to think exponentially, which creates a ton of barriers to our vision of the future. Start to make this exercise of changing perspectives, start thinking exponentially in certain scenarios and enjoy the new world of opportunities.