Compounding / Amazing Compounding

Compounding is the ultimate engine.

A dollar in, two dollars out which yields 4 dollars out. Even $1.01 out, given enough time.

This contrasts with “straight sales” or marketing which adds customers linearly (this isn’t a problem and may be better if you are starting with a small enough base or don’t need many sales or the cost of sales is inherently high)

… a business “flywheel” that drives growth.

… you need to watch for “fading” compounding where there are diminishing returns (“S” curves in markets)

Amazing compounding variant

… an amazing product or service is a compounding engine for word-of-mouth growth that should not be neglected

… and a crappy product or service will have the opposite – acting as friction on your growth engine.

Similar Posts