Growth Cycle Theory
The Growth Cycle theory explains how industries achieve continuous growth and how digital technology has impacted it over time.
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In its simplest sense, achieving growth is all about Discovering an idea, triggering a Conversation among like minded people and Collaborating to deliver a tangible outcome which triggers growth. Lets take a look at each in detail.
Discovery is the process through which people learn about an opportunity or a stimulus which could potentially lead to the next phase of growth. Having access to information and finding spontaneous connections is key to this.
Conversation is how we evaluate, learn, exchange information about a discovery. The idea here is to keep it fun and explore something from every angle to find a market fit which could lead to growth.
Collaboration’s literal definition is “the action of working with someone to produce or create something” and that’s exactly what it is. Unless there is focused effort towards building something real; its very hard to achieve growth. As such collaboration requires people to come together and work individually as well as collaboratively to produce something tangible.
Once collaboration ends up producing something useful, it usually ends up with more insights and ideas, which could be natural evolution of the original idea or a more tangential insight leading to the next phase of growth. As such the cycle continuously evolves to produce iterative growth over time.
Lets look at this cycle with the example of personal computer (PC) revolution. The Discovery process was triggered through personal hobbyists in Silicon Valley tinkering with microprocessors to build computers for the general public. The Conversation around this discovery played a key role in exchange of ideas and was captured through hobby clubs and magazines. All this resulted in more serious initiatives where people came together to build new technology. The most popular among these was of course Microsoft and Apple besides others like MITS, VisiCorp. These companies further led to discovery of more insights and learning in this space. For instance, Apple popularized the concept of GUI (Graphical User Interface) which led to lot of research and conversation around the same. As such growth of personal computers from mainframe machines to personal desktop computer to notebook to mobile phones can be thought of as multiple growth cycles happening over and over again. Almost every other industry has gone through this growth cycle whether it be retail, entertainment, travel etc. Although the basic structure of this Growth Cycle has remained same, what has changed, is the nature of it over time which is primarily influenced by two factors; Speed & Scale.
Speed & Scale
Speed and scale are two important factors influencing the individual stages of Growth Cycle. For instance when it comes to Discovery, speed means how quickly new information can be discovered and scale means the reach of that new information. In context of Conversation, speed is how fast people are able to exchange their thoughts and scale translates to how many people are able to join the conversation. When it comes to Collaboration, speed is the pace of working together without any friction and scale is the population percentage that can collaborate. Taking again the example of personal computing revolution, the discovery and the conversation process was mostly happening through hobby clubs and physical newsletters. Consider this excerpt from this article -
In September 1973 Radio Electronics published an article describing a “TV Typewriter,” which was a computer terminal that could connect a hobbyist with a mainframe computer. It was written by Don Lancaster, an aerospace engineer and fire spotter in Arizona who was also a prolific author of do-it-yourself articles for electronics hobbyists. The TV Typewriter provided the first display of alphanumeric information on a common television set. It influenced a generation of computer hobbyists to start thinking about real “home-brewed” computers.
As such, speed was constrained due to physical nature of information transfer and the scale was constrained too (primarily to Silicon Valley and nearby areas) because physical information could only travel so far. This in turn also led to constraints when it comes to Collaboration. What we have seen though over time is both Speed & Scale gaining considerable progress specifically in the last 50 year. Each stage of the Growth Cycle has benefited from it by and large. Lets take a look at each in detail.
Discovery
The discovery stage was a slow process for most of the 20th century. With the invention of printing press, it finally became possible to transfer knowledge in the form of written material to the mass public. With the PC revolution and use of computers, it became relatively faster and easier to copy, store and modify information. But the primary medium of transfer was either physical exchange or television. The Internet led to a complete disruption of the Discovery stage. Three major technologies; Search Engines, Social Media and Smartphones led to exponential improvement in both speed and scale of the discovery process. While search engines and social media made it easy to discover new information at the click of a button, smartphones increased the scale of discovery considerably. They provided an inexpensive medium for everyone to gain access to new information. With the prevalence of Artificial Intelligence now, the discovery process is becoming more and more personalized which means the information now finds you instead of you looking out for it.
Conversation
Conversation has closely followed the progress of the Discovery stage. Before Internet, the only way to get a bunch of like minded people to converse about some topic was to literally bring them in the same room. As such, both the speed and scale was excruciatingly slow. Even after Internet was widely available, it took some time for social media sites and blogging sites to become popular. But social media sites like Twitter, Facebook, LinkedIn, Blogging platforms like Blogger and messaging tools like WhatsApp, FB messenger etc made it possible for people to communicate over Internet and increase the pace at which conversation around ideas were happening along with the scale of it. We are continuously seeing improvement in this stage with the emphasis now being on making it possible to replicate the same natural real time interaction of physical communities. We now see tools like Discord, Slack and even ClubHouse, where the emphasis is to bring real world like interactions to life.
Collaboration
With the invention of personal computing, the speed of collaboration increased with the ability to easily record, share and modify information. With Telephones and later Internet, it became easy to interact and share information without actually meeting physically. And now with Cloud Computing, the tool-set is continuously moving to cloud, removing any friction in terms of exchange of information. As mentioned in The Past, Present and Future of Workplace Technology.
You could find any application or tool on the internet with a link. No setup, no additional hardware; just a link. With this, instead of sending individual files back and forth, what you need is just there. Anyone (who is allowed) could see the info, and make changes immediately.
All the three different stages in Growth Cycle are seeing tremendous acceleration both in terms of speed and scale. What this means is growth itself will become more prevalent around the world and become more fast paced. We are seeing and will continue to see Growth Cycles where the entire process from Discovery to Conversation to Collaboration will happen in span of months, will be entirely virtual and would connect people from various backgrounds and locations. For example, Miami’s Mayor Francis Suarez is trying to bring startup growth to the city and he has been able to do it entirely virtually, connecting entrepreneurs and venture capitalist from around the country. The mayor discovered the growing interest of movement away from Silicon Valley and joined the conversation on Twitter asking questions, offering insights and learning from the community. Also, when it came to collaboration; the Mayor turned to Zoom by hosting town halls, meetings with entrepreneurs. The city was able to receive traction, redefine its image and get help from investors and entrepreneurs all in span of one month. All this goes to show how far we have come when it comes to producing hyper Growth Cycles and hints towards whats in store for future.
AI, VR, Crypto and Hyper Growth Cycle
Internet has unlocked innovations which has led to tremendous acceleration of Growth Cycles. The progress in terms of scale is enabling every person on the planet to take part in any individual stage of the GC and push the world an inch closer towards becoming a sort of Metaverse. This also means that there is lot of work left to do and there are many opportunities for progress in every stage.
Discovery as it currently stands is mostly intent based or hacked into place by relying on real world networks. The former means there is a some amount of hit and trial involved to discover insights and the latter means there is lot of noise on social media which eclipses nuggets of useful information. As I explained in TikTok & the New Internet -
The primary problem with this approach is that it puts too much responsibility on the user and is not a perfect proxy for what user wants to watch or consume. My Twitter feed, I would say, has at any point 50% noise and 50% useful content even though I have tried my best to manage and organize it.
These limitations are being overcome with the adoption of AI and platforms like TikTok which rely exclusively on AI to build an interest graph and give you information which you are interested in.
Conversation stage is missing the spontaneity of real world interactions especially when it comes to group conversations. Also, there are language barriers involved which lead to constraints of scale. The pandemic has although made people embrace virtual conversations with all its shortcomings. Plus, future tech like AI and VR are two big long term bets in this space which can bring the much level spontaneity as well as removal of physical boundaries. Applications like Facebook’s Horizon virtual world/meeting place, Unreal Engine are some early initiatives in this space.
Collaboration although has similar problems to Conversation, the effect is less pronounced since the former usually involves less spontaneous and more professional interactions, thus lowering the expectation of real world communication. But collaboration faces a different hurdle that effects its scale or reach. Country wise restrictions pose challenges to the free collaboration of labor. Working with a person from a different country poses both monetary and regulatory challenges. Crypto & Blockchain technology could potentially be the game changer in this space. It can disrupt the traditional monetary structures and allow everyone in the world to freely transact with each other. Crypto can also disrupt the incentive model that is a key enabler of collaboration. It can simplify the concept of equity allowing even smaller business to bake in equity to any stakeholder who gets involved in their idea without the hassle of traditional contracts and regulations. This can significantly facilitate collaboration, removing any monetary friction among people who are working together. Fairmint.co is a platform that is a step in that direction.
Growth Cycles are happening at a blistering pace now more than ever before. Its one reason why we are seeing new technologies being introduced and adopted at a much faster rate. What this means though, is that we are entering a future which doesn’t fit in very well with the traditional government structures and the world order and that is a big unknown. It would be interesting to see how this dynamic plays out in future.
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