Compounding Crazy

For one, the faster a new company is built, the faster other companies can benefit from it. New primitives create new opportunities for innovation. Kind of obvious.Less explored is the fact that if a new company needs fewer employees, because it can outsource whole functions to APIs and software, there are more talented employees freed up to go sta... See more

First, there are the timing risks.

But what’s wild is that that’s what the current $300 billion in venture funding is investing into -- things funded today might not be public for another decade. The $2 trillion in hypothetical 2031 funding, which would need to return $4.25 trillion per year, would feed into the following decade. By 2041, at the same CAGR, the world’s public equitie... See more

Our own experience makes us stubborn old men about the future. We have lived through past growth rates. We’ve never lived through future growth. Therefore, it’s a lot easier for us to intuit what the future will be like by extrapolating linearly based on what we’ve actually experienced. Yes, things will be different, we all know that, but they’ll b... See more

Then, there are macro and tail risks.

What happens to the markets if the US Dollar somehow loses its status as the global reserve currency? The climate change threat isn’t going away any time soon. Will a further run up in the financial markets create such extreme wealth disparity that it causes violent unrest? Will governments tax investment gains, or even stifle innovation, in order ... See more

Zoom out. As Patrick Collison said when describing his admiration for Jeff Bezos to Ezra Klein:There’s something quite deep about the notion of using time horizons as a competitive advantage, in that you’re simply willing to wait longer than other people and you have an organization that is thusly oriented.

So how do you prepare?

This is demonstrably true, using DPUs or actual numbers, but according to Urban, there are three reasons we can’t grok the impact of exponential progress: