The 1% nonsense

A very popular narrative is that you only have to invest a few minutes every day in training, work, knowledge, contacts, physical resource or a sociological resource and after a year, through the effect of compound interest, something really big will be the outcome. In order to illustrate this, let us consider the following example.

Let’s imagine that it is true for a entire social network that one new post generates an average of 1 % new followers.

And now my 1% story: Invest 3 minutes every day in a posting on your social network and with every posting, the number of your followers increases by 1%. If you start out with 100 followers, after a week you have 106 followers, after a month 135 and after a year 3741 followers.

Why do these 1% stories impress us at first? Small investment – enormous growth – big profit!

For these 1% stories to be actually achievable, the projected growth has to be exponential. Unfortunately, this exponential growth does not apply to the propagation of 100 flowers in your garden, even if the initial values would also be 1% growth.

Biological systems often follow logistic curves, these are those curves that have the characteristic shape like an S. In the gradient part they look like exponential functions for a short distance. In our example of one posting per day, I chose such S-curve as my model, means the constant worker recognises the difference between 100 and 150 days later, because then the curve begins to slope down.

In my imagined model we reach 500 followers at the end of the year, which is a great increase and was worth the effort of about 18 hours of typing. However, compared to the targeted 3700 followers, the result is disappointing.

Which is exactly my point of criticism of these 1% interest rate stories, almost nothing in a limited market grows exponentially. I worry that the lack of realism and the disappointment along the way of not creating enough growth leads to dropouts and demotivation.

The reasons in the stories are often brilliant, it’s worth investing a constant 3 minutes a day in something good. You get smarter, generate more customers, become more athletic or whatever. Just not exponentially.

Exponential and logistic growth
Exponential and logistic growth