Compounding is a superpower. It’s not just about money; it’s everywhere - in relationships, health, learning and so on. Humans struggle to understand compound interest because our brains are wired to think linearly, not exponentially.
Most careers progress linearly. Seek work that compounds. As your career progresses, each unit of work should produce greater results. Building a startup, brand or audience compounds in two ways: directly through the inherent leverage of these methods and indirectly through the learning gained in the process. If you’re learning a lot, even in failure, you’re experiencing exponential growth.
Positive habits have a powerful compounding effect. Small, consistent actions can lead to significant changes over months and years. If you improve by 1% each day, you will be nearly 38 times better by the end of the year.
Reputation compounds as well. Building your reputation unlocks access to leverage in the form of capital and people. Relationships also compound. In business, both reputation and relationships are built on trust and are the foundation of a strong network. These compounding effects often create second-order growth, amplifying each other's impact.
The biggest advantage in business is gained by long term thinking. Trust the exponential and be patient. In the words of Naval Ravikant, play long term games with long term people.