Understanding The Exponential Nature of Technology
IT — Information Technology, is one of those funny words that over time have gradually become a part of everyday lingo and in doing so have gradually been robbed of their meaning. On the one hand being such a broad term has its advantages, like explaining to people of your parents’ generation what you studied at the University (Computing) or helping them understand what current career you’re in (Edtech).
On the other hand, the very definition of IT embodies such a simple yet profound truth that being a cliché strips it of. While that’s typical of clichés I feel the disservice done to IT profoundly.
One of the simpler definitions of Information Technology is the use of computers, storage, networking and other physical devices, infrastructure and processes, to create, process, store, secure and exchange all forms of electronic data.
A clear understanding of IT will help with keeping the rest of the article in context.
“Once something becomes (in) Information Technology, it becomes subject to the Law of Accelerating Returns and grows exponentially.”
I first heard that quote from a recording of a lecture or speech Ray Kurzweil was giving. Ray Kurweil is an Author, Computer Scientist, Inventor and Futurist. As a Futurist he has quite the reputation for being rather spot on with his predictions.
From the above quote, the Law of Accelerating Returns talks about how the returns or effects of exponential growth will themselves grow exponentially. In other words, the benefits of exponential growth will greatly increase over time, and grow exponentially.
Exponential growth is self-explanatory ; I especially like the definition by Dictionary.com — the growth of a system in which the amount being added to the system is proportional to the amount already present. The bigger the system is, the greater the increase.
To illustrate the above, let me use one of Ray Kurzweil’s examples:
30 steps linearly takes you to 30; 30 steps exponentially takes you to a billion
A 30-step linear growth model would look like this: 1,2,3,4… 30. For exponential growth, 30 steps = 2, 4, 8,… 1.07Billion.
Same number of steps, different degrees of impact.
What Does That Have to Do With Anything?
The best references will be AirBnB, Konga, and Uber.
AirBnB — Once ‘accommodation’ becomes Information Technology, it becomes subject to the Law of Accelerating Returns and grows exponentially.
The above has to be one of my favourite tweets. By becoming Information Technology accommodation can be created (listing an apartment), processed (verifying listed apartment) and stored (saved in some form of database or the other for later retrieval).
Konga — described as “Nigeria’s largest online mall” is commerce becoming Information Technology; better known as e-commerce.
In November 2013, Konga debuted their version of Black Friday sales called Yakata. According to the CEO at that time, Sim Shagaya, they prepared for twice (2x) their regular traffic, based on their own data. What they received though was not double, but 16 times (16x) higher than the anticipated traffic. During that period they reportedly sold a total of $300,000, outstripping their total sales in the previous month in the first 6 hours of Yakata. The following year, November 2014, they didn’t make $600,000; which would have been double their previous figures, instead their orders totalled $3,500,000!
Once ‘transportation’ becomes Information Technology: since inception in 2009 Uber is currently available in 408 cities. Imagine for a moment if you will, the cost (money, time, human resources, legal fees)it would take a traditional transportation company to reach that scale.
And the list goes on and on…
Once ‘socializing’ becomes IT (Facebook), education (Coursera), publishing (Kindle Direct Publishing), money (Bitcoin). It appears that some of the most successful and disruptive businesses are those that (whether by design or not) have been able to leverage the law of accelerating returns.
What’s responsible for the exponential growth of ‘things’ once they become Information Technology? I believe this can be linked to access.
Moore’s law states the overall processing power of computers doubles every two years. For data to be created, processed, stored or exchanged, it would have to take place via some device or infrastructure of some sort (e.g the internet).
Therefore, the decrease in cost, and increase in computing power of devices and infrastructure helps to facilitate the process of democratisation.
A brick and mortar store is only accessible to the people within its vicinity. Put the same products from the brick and mortar store online and you open them up to the billions of people on the internet, who are accessing via one device or another (mobile, desktop) and via one network or another (mobile network, ISP). Now, whether or not one then chooses to restrict the purchase of their products to a particular geographical location (whether due to logistics of shipping, inventory management, payment restrictions etc — another sign that traditional systems have not caught up with technology) is another topic entirely.
In one way or the other, all of the examples above have roots in one or more of the 6Ds of exponential growth — deception, digitization, disruption, dematerialisation, demonetisation and democratisation. I’d encourage you to read more about the 6Ds here.
Summing it all up
The above examples would appear obvious and perhaps half as exciting outside this context — the Konga figures for instance aren’t new. But what is of greater interest is attempting to identify a similar trend that somehow connects the successes of these organisations, which is the exponential nature of technology.
Understanding this is especially important, given that human beings are by default linear thinkers. In October, I will be x+1 years; given that my current age is x years. Under no foreseeable circumstance will I be ‘x times x years’.
I’m passionate about quite a few things — education and extreme poverty being top of that list. With the recent launch of relearn, our attempt at bridging the education gap within the country by enhancing the experience of learning in schools, this couldn’t have been better news. In spite of the looming challenges, most notably the infrastructure deficit in that sector, when technology meets education in smart ways and within the right context, then the unimaginable can happen.
‘If I thought linearly, like most people do, I too will become pessimistic.’
That’s my third and final quote from Ray Kurzweil. He then goes on to talk about the law of accelerating returns and exponential growth.
As I continue to work towards fully grasping the power of exponential technology, I look forward to the day I can boldly make the above statement as Kurzweil did.
So for the entrepreneur who appears to be shooting in the dark, or the student attempting to share their first product with the world, perhaps understanding this offers you too a glimmer of hope, and better places us collectively to leverage the power of exponential technology and impact the world for the better.