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The Advantage of Consistent Progress
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In 1995, two startups launched in Silicon Valley.
Startup A skyrocketed. Within a year, they grew by a staggering 1000%, but by year three, they were facing a 60% decline and by year five, they folded completely.
Startup B chose another path. They grew a modest 10% year-on-year. Not glamorous, but by year five, they had grown cumulatively by over 60%, and by year ten? They clocked in an overall 100% growth, stable and strong.
These contrasting trajectories aren’t just theoretical—they represent a real dichotomy in business.
We're often swayed by big numbers and rapid growth.
Startup raises $100 million in Series A! It's captivating.
But it's not the full story.
For every Uber, which reached a $70 billion valuation in about 7 years, there's an HP. Hewlett-Packard took over 20 years to hit the billion-dollar mark, but today, more than 80 years since its inception, it's a testament to sustainable growth.
Or consider Airbnb. From 2008 to 2011, they had a 13-fold growth, impressive for sure. But it took them nearly a decade of steady work to become the industry titan they are now.
Here's the math most people don't talk about:
Rapid growth can lead to a faster burnout rate. A 200% growth one year followed by a 50% loss the next still puts you behind compared to a consistent 15% growth every year.
Warren Buffet once quantified his investment approach with, "Our favorite holding period is forever."
AKA. Steady, long-term growth over fleeting moments of high returns.
So, when evaluating a business opportunity or an investment, look beyond the immediate percentages.
Dive deeper into the numbers, evaluate consistency and sustainability.
Because, in the intricate arithmetic of business, steady progress, no matter how slow, often sums up to a winning formula in the long run.