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1-Page Summary of Exponential Organizations

Overview

Business models have changed. Large, slow-moving organizations are no longer the dominant force in business. Instead, new companies are achieving growth rates that were never thought possible before. How do these companies get to such high levels of growth? They’re called exponential organizations (ExO), and they achieve exponential growth by starting at 5% annual growth and doubling every period! Companies like Uber and AirBnB are examples of ExOs that will define tomorrow’s businesses. If your company doesn’t know how to turn itself into an ExO, then you need to read this article for key takeaways on how you can become one!

ExOs (examples of entrepreneurial organizations) are doing amazing things in the world. They teach governments how to be more efficient and effective, as well as inspire companies to take risks that they wouldn’t normally consider.

Big Idea #1: While still a new concept, exponential organizations are the future of business organizations.

Have you heard of companies like Uber and AirBnB? If you have, then you’ve also come face to face with an exponential organization. An exponential organization is a company that can leverage new technologies to produce ten times more output than other companies in the same field.

ExOs are able to do more, produce more and dominate their niche with less resources than other companies. ExO’s are experts in adaptation. They’re part of a new business paradigm where competition doesn’t necessarily come from big companies based in China or India. In fact, competing firms could come equally from startups!

The age of a company or how many people it employs doesn’t mean that the company will be successful. Kodak is an example of this; it was once a large, historic organization that went bankrupt almost overnight.

The business world is now much more fickle, and companies can experience unprecedented levels of success with a minimum amount of resources.

Exponential growth is a concept that’s often misunderstood. For example, the Human Genome Project aimed to sequence human DNA. In its first seven years, researchers sequenced one percent of our DNA; however in the following seven years they were able to complete the remaining 99 percent!

ExO companies are different from traditional organizations, as they are small and flexible. Some examples of ExO firms include Uber, AirBnB and Google. These companies have embraced the open source model for their businesses to reach more people. Even scientific research has adopted this model with websites like Researchgate and Figshare that allow researchers to share their findings online.

The ideas that were discussed in the book have changed much of what we know about business. There’s more to come…

Big Idea #2: Old-school organizations are too linear in their thinking. ExOs are agile, flexible and fast.

Coca-Cola and GE are still at the top of their industries, but they need to change in order to stay there. Let’s look at the reasons why.

Companies are no longer limited by traditional limits on growth. They can grow in ways that aren’t necessarily consistent or predictable, and the old model of linear growth is obsolete.

Technology has made it possible for everyone to have access to powerful machines at a relatively low cost. This is especially true in the case of computers, as technology advances exponentially over time.

According to futurist Ray Kurzweil, companies that are based on information technology will be more successful than those that aren’t.

The life span of an S&P 500 company has fallen from 67 years to 15 years.