Some people call it the Hockey Stick Chart. Others talk about Exponential Growth Arc. I’ve always looked at is as a J-Shaped Curve.
The concept of the J-shaped curve is both a visualization tool as well as a real effect. The principle of the J-shaped curve to get a positive result in the short-term takes more applied effort and output. Over time your results improve and compound to where the compounding effect creates a greater yield.
The J-shaped curve is mostly flat for a period of time until results catch up with the input, and then a dramatic rise of the curve begins to happen.
Imagine learning to juggle. If you graphed your attempt, progress would be very slow and filled with failure. Your graph is very flat at this point. Over time and with practice, your skill begins to come around. The positive results begin to increase, and your graph begins its journey upward.
Eventually, with enough time and practice, you are proficient at the skill and your result graph is now very high, giving your chart the J shape.
Compound Interest as a Working Metaphor
If you started with a single penny and doubled it every day for a month, how much money do you think you would accumulate? Most people will guess somewhere between $100 and $1,000. It only makes sense. It’s just a penny doubling.
The astonishing fact is that if you doubled a penny every day for 30 days, your total would be a mind-boggling amount: $5,368,709.12!
How Compound Interest Works
Compound interest is interest earned on interest. With the principle of compound interest, you have a sum of money invested over time, earning interest. The interest is added to the initial principal where it is also compounded and added to the original sum, and the cycle continues.
Compound interest starts out slowly but builds over time as your interest earns interest, resulting in a snowball effect.
What does this mean in terms of living your life?
Look at your applied efforts as your principal contribution. Your additional efforts and reinvested gains are comparable to the compound interest effect. As with compound interest, the more you can stack your efforts on top of each other, the more they will compound. This is why it’s critical you don’t take action for action’s sake, but with a clearly defined destination.
Your applied efforts are the equivalent of your interest rate as a multiplier of your initial efforts. It requires patience and consistency, making and reinvesting small gains and improvements over time and growing your success bank account.
In my own case, I did not discover, until much later, the shortcuts I had been taking were actually depleting my success bank account and putting me further behind.
Success certainly does not happen overnight. It is incremental – One log at a time. Like the beauty of a sunny summer day that is sometimes hidden in plain sight, so we take it for granted, so also are the principles and foundations for success. They are hidden in plain sight, available for everyone, but used by relatively few.
Unfortunately for all of us who live in a very impatient society, we cannot microwave our results or take shortcuts. Even with the principle of compound interest, we still must grind for a period of time without seeing a lot of results. Just as the penny doubled daily for the first 10 days only produced a measly $5.12, by the end of the second 10 days, the result was over $5,200 and the result at the end of the third 10 days over $5.3 million.
Most people fail to achieve great success in an endeavor because they quit before they really see the gains and results improve.
History is filled with stories of people who failed simply because they quit too soon.
Consider how you might apply the lessons of the J-shaped curve to your business and to better serve your clients?
It might not always feel like you are making all the progress you want. Even when you don’t feel like big things are happening, stay diligent and focus on just being consistent in the little – but still important things to serve others. As you add value to those you serve, you can’t help but to compound your own results.
-Frank F. Lunn
CEO & Founder of Kahuna Business Group