Recently, I read the latest essay by a tech investor and Y Combinator founder, Paul Graham, and was mesmerised by the concise lessons in the essay. Below is a bullet-point summary of the essay for you. Enjoy!
1. Performance returns are often superlinear - meaning if you do twice as well, you get more than twice the rewards. For example, if your product is less than a competitor's, you may get no customers and go out of business. Superlinear returns apply across many domains, including business, fame, knowledge, and benefit to humanity.
2. Two leading causes of superlinear returns are exponential growth and thresholds/winner-takes-all scenarios. Knowledge and startups can demonstrate exponential growth - the more you know or the faster your startup grows, the easier it is to build on that progress. Sports and competitions have thresholds where the winner takes all, regardless of whether they win by a little or a lot.
3. Seeking work where your performance compounds is a good strategy - where doing well now leads to even better performance later. This includes building infrastructure, growing an audience or brand, and acquiring knowledge and skills that aid future learning.
4. If you identify a product or service that is mediocre yet still popular, replacing it with something better is a promising approach. Since people already use the tolerable option, they will likely adopt a superior alternative.
5. To fully capitalise on superlinear returns, you should aim to do outstanding work and take risks. Following intrinsic curiosity often leads to exceptional work rather than diligence alone.
6. A steep return curve correlates with higher outcome variation - superlinear returns inherently lead to greater inequality. The further you push performance, the greater the rewards tend to be.
7. Fields like sports, politics, art, math, science, startups, and investing exhibit superlinear returns - a few big winners dominate over everyone else. These fields reward truly novel contributions.
8. In these fields, it pays to put in initial effort even if progress seems discouragingly slow initially. Exponential growth means the rewards for sticking with it can eventually be huge.
9. Don't equate work merely with having a job. For creators, researchers, and innovators, work means contributing to their domain - not just occupying a job.
10. Following curiosity can organically lead you to superlinear return fields, as answering interesting questions can uncover vast untapped potential. Curiosity draws you to the most promising opportunities.