Human brains were designed for a world of lateral change. But, as Ray Kurzweil and others remind us, learning-by-trial-and-error systems introduce the potential for exponential change. This has huge implications for how we design and build organizations and systems.
You’re not imaging it — things really are moving faster
Among the most profound shifts facing organizations and their leaders today is that of going from linear change to exponential change. The “exponential” organizational form is radically different than one built to capitalize on linear evolution. Such organizations leverage technology and networks to create impacts that people working in more conventional settings could never accomplish.
A familiar example would be Instagram. Founded by Kevin Systrom and Mike Krieger in October of 2010, the startup appeared at exactly the right time for users to take advantage of high-resolution multi-megapixel smartphone cameras. Its growth in the initial phases wasn’t particularly inspiring — by 2012, the startup only worked for Apple IoS devices, had 50 million users and wasn’t making a whole lot of money. But then in April of that year, Instagram for Android was released. It was downloaded more than a million times in one day, clearly launching the beginning of a potentially meaningful growth curve.
Facebook’s Mark Zuckerberg and his team realized that they were facing an exponential competitor in the connect-with-friends-and-family space. On April 9, 2012, Facebook bought Instagram for $1 billion. At the time, the firm had all of 13 employees.
Facebook turned out to be right about the exponential nature of the Instagram organization. It reached a billion users in June of 2018. By 2024, Instagram was generating $51.4 billion in revenue (almost 45% of Facebook’s total) and had attracted over 2 billion users.
The difference between linear and exponential change