Are you building for exponential growth?

By Ben Elms

Quick question: why do you think Amazon has been so successful?

I’ll tell you my view. Amazon went from simply selling books online to building a platform that has enabled it to sell anything online. To anyone. Now it can scale into pretty much any market at speed if and when it deems the opportunity profitable enough. 

In short: it has built an exponential business. 

If you’ve not heard the term before, Singularity University describes an exponential business model as one that “looks at the same key areas as a traditional business model but with radically different goals.”

Rather than setting linear, incremental targets like increasing profit by 10% year-on-year, exponential businesses aim for changes that will increase current values 10 times over. And they achieve that by only spending time on innovations that will impact a billion people or more. 

That’s the business world we live in today.

How do you compete if you’re born analogue?

Of course, companies like Amazon that are born digital will naturally find it easier to scale exponentially. They can deploy new technology and processes faster than traditional companies. 

But what if you were born analogue? How can you possibly compete with these new players?

Sure it’s a big challenge. But it’s not impossible. After all, if you’re from the same generation from me then you’ve lived through the digital age from its very beginnings, which makes you more than qualified to deal with change. 

As for changing a traditional analogue business to compete with those that are digital-first, for me it’s about building and managing your organisation in a way that not only makes you resilient to rapid change but also better able to make the most of the huge number of opportunities it brings.

Let’s go back to the Amazon example. If the company had tried to focus only on whatever the new trend was and work towards that, it would never have succeeded like it has. 

Instead, it built its business in such a way that no matter what the current trend turns into it is ready to operate in that market. 

And it’s clear consumers don’t have an issues with this. Once they became comfortable buying one thing from Amazon it wasn’t too much of a jump to buy their groceries or stream video content on the same familiar platform. 

It’s simple: when you don’t know what the world will look like in two years, let alone ten, you can’t possibly hope to predict what’s coming. But if you build your business for exponential expansion you’ll be ready to profit from any opportunity, whatever that opportunity turns out to be.

Making the change

I’m sure many of you reading can see the value in positioning your business in this way. But how do you actually achieve that?

This question is particularly pressing for those from traditional firms. It’s one thing saying “this is how we’re going to do things starting tomorrow” when you’re a five-person start-up. It’s quite another achieving that when your technology is 20 years old and you’ve got 15,000 employees across 30 countries.

But as I said above, while it’s challenging for incumbents to keep up, it’s not impossible. You just have to create an environment where people can think and act as if they were part of a smaller and more agile organisation.

Spotify describes its agile engineering culture as “loosely coupled but tightly defined squads,” i.e. leaders focus on which problems need to be solved but let individual teams work out how to solve them. 

Sure, Spotify was born digital. But there’s absolutely no reason an analogue-first business can’t follow these same principles. 

Case in point: we used that same methodology to power innovation in our youth programme, Voxi.

We wanted to come up with a way to make our products and services more appealing to young people. Rather than sit in a room with each other trying to come up with ideas we went straight to the source and asked a group of teenagers what they wanted. 

Based on their feedback we put a team together, built the new functionality and brought it to market in a matter of months. 

Wind back half a decade and that would have taken us years, not months, and we’d have missed the market. But because we’ve empowered people to work in this agile way with fewer restrictions, they were able to do something truly innovative in a much shorter timespan.  

Equally important is hiring people who don’t always come from traditional backgrounds. How can your business be exponential if all your people think in exactly the same way?

How you structure your organisation is critical, too. Creating a much ‘flatter’ organisational structure gives people the freedom to collaborate with a wider range of colleagues and get involved in more projects than they otherwise might.  

And once you have the right people and structures in place, you need to empower them to innovate freely. That’s where the agile methodology I mentioned above becomes critically important.

Time to look ahead

The world is only ever going to speed up, but I don’t think that’s anything to be afraid of. 

As long as you’ve got a curious mind, a thirst for learning and a willingness to embrace new things, you will always find opportunities to grow and develop into new areas in the future. You just have to create the foundations now.

And when you know you’ve got an almost unlimited number of options for expansion, most of which you can’t even imagine yet, the future starts to look really exciting.  Are you ready?