A Theory on Growth
Growth requires three things: tracking, analysis, and execution; in that order. To grow fast, add capital. This is how growth is accomplished in practice, but most do not grow because of psychology.
Growth requires hardship. Nothing great was ever built or accomplished without facing the unknown and encountering trials that test your limits. You’re not growing because you are comfortable. Let’s call this aspect Growth Psychology.
Growth Psychology is rooted in all the things modern society has programmed us to avoid. Sacrificing short-term pain for long-term results, patience, uncertainty, and the possibility of failure. But since we are all programmed to look for the fast dopamine and quick fixes, let’s start with the practical methods to growth. We can call this Growth in Practice.
The key to Growth in Practice is mostly just knowing where to look. Good examples of this is in the utility of coaches and mentors. They use their experience that they gained from their own path of trial and errors to show you where to look. Figuring out where to look is realizing you are in a cave and then cultivating the curiosity to find the way out.
Plato’s Allegory of the Cave
The best way to figure out where to look is to track the data. Great authors often say when they are blocked, they read to find the inspiration to write. Collect inputs to spark inspiration.
Knowing what to track is knowing where to look. Luckily for us, there are very basic metrics that transcend objectives that we can start with. There are two categories of metrics to track: input and output, and optimizations. Marketing spend and revenue, and conversion rate optimizations. Calories in and calories out, and progressive overload; to name a few.
The importance of tracking cannot be understated. Without collecting the data and monitoring the pulse of any objective, you are flying blind and will never end up at the destination or worse, crash.
Tracking makes you aware that you are in a cave. Once you collect the data you can begin to see the light. Now you have to determine the best path forward. This is where analysis comes in.
Analysis is what separates great from good growth but is also the most difficult to do because it is an effort in pattern recognition and creativity.
Pattern recognition can really play to some people’s innate talents where the data tells a story, while for others it is simply just a collection of numbers. To conduct proper analysis, try to find the story that the data is telling you or find someone who can.
Finding the story that the data reveals is like finding a diamond in the rough. 99% of it is noise but the 1% can grow you 100x. Once you find the diamond, this is your signal to get creative.
The path forward to capitalize on this insight from the data relies on creative solutions. This can be farmed out to a team (e.g., management, marketing, coaches) for brainstorming, but the best creative insights are often found alone and in a relaxed environment.
Finding the diamond in the rough and developing a creative solution to capitalize on it is what creates real wealth, not hard work. Warren Buffet spends all day reading and playing bridge, but this relaxed state makes his decision-making multiple times better than any day trader grinding. The developer finding the right land to build cam accomplish 100x more than the worker hitting the nail.
Analysis for growth is pattern recognition and creative insights to capitalize on that pattern in a way that sparks leveraged change for any endeavour. Now you must execute.
The key to execution is intimacy. Keeping the method to execute intimate reduces risk. The more impactful the creative solution for growth is the higher the risk attached. To minimize this risk in the execution phase, run a test with limited resources, time, and people. This is called “Growth Hacking”.
Growth hacking is essentially a methodology to test ideas to spark growth. It claims its success is in the speed of iteration between different growth tests, but another benefit is its ability to reduce risk. To execute well, test your growth hacking hypothesis on a portion of the objective and for a set period of time, then collect the data and analyze again whether it is working or not.
Growth in Practice relies on the leveraged impact of the creative solution and the speed of iteration. The solution with the largest outcomes have the most risk so approach execution carefully and then iterate according to the results. If you want to grow fast, once you find the leveraged solution, add capital in the form of marketing, incentives, or technology.
If you are trying to grow you are likely doing a version of this method of Growth in Practice. But you are hitting a ceiling because you are missing something in the tracking, analysis, or execution phase. If you’re smart and ambitious, then you know where to look and have the data (or know someone who can tell you where to look). You also know how to analyze it well and find the room for improvement. Where growth stalls is in finding the creative solution to implement. But this is not the real reason most people never grow.
Most people never grow because they are comfortable. The desire to grow stems from a desire to test human potential. If you are satisfied with where you are, then continuing to grow has diminishing returns for you. This is the psychology of growth.
The flashing lights of money, status, and spite may pour fuel on your burning desire to grow but it will be a short flame. Dissatisfaction is the coal that keeps the fire of growth burning. Nothing guarantees growth more than that little voice in your head asking: what is my true potential?
There are three mental features of growth. All of which must be maintained in order to sustain it: 1) psychology, 2) philosophy, and 3) experience. Each trait determines your success and is what growth requires.
The psychological state informs the amount of pressure you can handle and what is at stake to grow. As the pressure your face increases, the more psychologically strong you must become to continue to level up.
A lawyer fresh out of law school starting their own solo practice has to have a different level of psychology than the kid going directly into a stable firm because of the risk and uncertainty attached to their failure and the impact that will have on their well-being. At a higher level, the firm owner with fifty staff on the payroll has a very different psychological approach than that solo practioner. There are levels to psychological pressure and your ability to grow increases as you become more accustomed to the pressure.
The philosophical state determines your endurance. This is your why. The reason 92% of people quit their new year’s resolutions is because they lack a why that truly mirrors their philosophy. The person on the diet for the vanity of other people’s approval (or better yet, spite) will burnout much quicker than the person doing it to be able to play with their grandchildren. Your why is the reason you pursue it every day and persevere in the face of hardships.
For most people, their why is money. This can be a strong motivator, but the growth of any endeavour will quickly fade once a better offer comes along. The best why is directly related to your worldview and the reason you would continue doing it if you already had everything you ever wanted. We endure something because we love it.
The experience state determines your skill to execute. Experience is the lever that spikes growth that is inconceivable. It is the Product-Market-Founder-Fit. This does not necessarily mean the number of years you have in a particular profession, but rather the mastery you have acquired from what you have seen and your ability to apply dimensional thinking across different fields. This application of experience to the skill of dimensional thinking is crucial for growth because healthy progress is a balancing act full of ups and downs, not a straight line in one domain.
Growth requires a reason to grow. It is painful and full of peaks and valleys, or worse, a journey to complacency. Those who approach it with the right blend of the hubris to expand their capability and humility to learn, will be successful.