October 22nd, 2024 | Compounding is a myth

October 22nd, 2024 | Compounding is a myth

Compounding in business is not always the case.
It's only the case if your business has network effects or if your growth channels have network effects.
If your business model is in mediocristan aka no network effects, no economies of scale, as you get bigger, gravity (churn) keeps you down.
If your business model is in extremistan aka network effects, economies of scale, as you get bigger you accelerate and fly.
So you want to start off in a non network effects business and industry, and slowly over time move there.

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