Growth & compounding

11 ideas across the corpus

The engines of nonlinear results — compounding, leverage, flywheels and network effects.

Big outcomes are rarely built in a straight line. Compounding turns small consistent gains into staggering totals; leverage multiplies effort; flywheels and network effects make each turn easier than the last. Understanding how nonlinear growth actually works is how you spot it early — and stop underestimating it.

Key ideas here: Compounding, The Pareto principle, Flywheel, Network effects, Leverage — and 6 more below.

Mental models

Mental model

Compounding

Compounding is growth that feeds on itself: returns generate further returns, so gains accelerate over time rather than adding up linearly. Small,…

Mental model

The Pareto principle

The Pareto principle — the 80/20 rule — observes that for many outcomes, roughly 80% of effects come from 20% of causes. A small share of inputs…

Mental model

Flywheel

A flywheel is a self-reinforcing loop where each part feeds the next, so momentum builds over time. Jim Collins’ metaphor: early pushes are hard and…

Mental model

Network effects

A network effect is when a product or service becomes more valuable as more people use it. Each new user adds value for existing users — so growth…

Mental model

Leverage

Leverage is using a small input to produce a disproportionately large output — Archimedes’ "give me a lever long enough and I will move the world." As…

Mental model

Critical mass

Critical mass is the threshold at which a system becomes self-sustaining — the point where enough has accumulated for a process to keep going on its…

Mental model

Moore's law

Moore's law is the observation that the number of transistors on a chip roughly doubles every two years, so computing power grows exponentially while…

Mental model