No BS: Harnessing the power of the ‘Super-linear’

No B.S Friday: You can complain about it, or you can ride it.

The world isn’t often fair.

Talk to gazelles. They spend most of their days trying to not get eaten by a lion… or a hyena. But they all get eaten by something eventually. Gazelles don’t die of old age, sitting in a retirement home with a blanket on their knees.

At some point, they just stop being fast enough to outrun their predators. They become the weakest link in the herd.

And they get eaten.

But still, you don’t hear gazelles complaining about how unfair life is very much. When was the last time you heard one? Because they know that this is just how it is.

In the human world, things are even less fair.

If it were fair, you would be paid the exact value of what you put in. Your effort would be equal to your reward.

But it’s not.

Even though they tell us, “You only get out what you put in.” That is never true. The ratio is never one for one.

And it can sit wildly on each side of the 1:1 line. A factory worker in China works a twelve-hour day at a sewing machine to earn a lousy six bucks. Kylie Jenner spends two hours swanning about at a movie producer’s party and earns $600,000.

The reward to return ratios are all over the place.

But this is just life. This is how it is.

We tell ourselves that this is the problem with capitalism or colonialism or whatever, but this is just how the world works.

Paul Graham – a Silicon Valley investor – calls this superlinear returns, and reckons understanding this dynamic is the most important thing you can do:

“One of the most important things I didn't understand about the world when I was a child is the degree to which the returns for performance are superlinear.

Teachers and coaches implicitly told us the returns were linear. “You get out,” I heard a thousand times, “what you put in.” They meant well, but this is rarely true. If your product is only half as good as your competitor's, you don't get half as many customers. You get no customers, and you go out of business.

It's obviously true that the returns for performance are superlinear in business. Some think this is a flaw of capitalism, and that if we changed the rules it would stop being true. But superlinear returns for performance are a feature of the world, not an artifact of rules we've invented. We see the same pattern in fame, power, military victories, knowledge, and even benefit to humanity. In all of these, the rich get richer.

This is why it can feel like you’re slaving away for years and never getting anywhere.

And it’s also why you can slave away for years, getting nowhere, and then suddenly become an overnight success.

You’ve got to slog away on the lower part of the exponential curve, where the returns are well below 1:1.

Only after you’ve done that for a while can you jump to the other side of the curve, where the returns are much greater than 1:1.

It’s not fair, but that’s just how it is.

But keep at it. You’re going to get there.

Soon, you’ll be charging $600K to do balloon animals on a movie producer’s lap.

You’ll get there eventually.

JG.