be exponential or perished.
Let’s examine some examples that will help us understand this:
DiDi, China's Uber
Uber, founded in 2009, currently has 75 million users and makes more than 15 million rides per day. Undoubtedly, not bad for a company with a 12-year track record.
Yet DiDi, founded in 2012, has 550 million users and already accounts for 30 million rides per day. Extremely impressive for a company that has been on the market for barely a decade.
Facebook, the company funding the Metaverse
Even more impressive, however, is Facebook’s revenue growth since 2004. In 2004 Facebook saw revenues of a measly $400,000. In 2005, this revenue grew to $9 million, an increase of 2.150%. A rapid advance that took them non-stop forward until 2018, when Facebook generated $55 billion in revenue.
A dizzying increase of 13.753.150% during the same 14-year period.
No doubt, it’s not easy to imagine how the exponential and ever-faster growth of companies like DiDi or Facebook works.
Exponential growth is denied even by the brightest minds.
In 1998, Paul Krugman, Nobel laureate in economics, predicted that by 2005 the impact of the Internet on the economy would be insignificant.
“By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.”
Paul Krugman, 1998.
Apple's iPhone is the most expensive phone in the world and it doesn't appeal to business customers because it doesn't even have a keyboard, which makes it not a very good email machine... Right now, we're selling millions and millions and millions of phones a year. Apple is selling zero phones a year.
CEO Microsoft, 2000-2014
Apple vs Microsoft Reveneus
CEO GENYUS SCHOOL
What exactly is an Exponential Organization?
To understand exponential organizations we must first understand the 6Ds of Peter Diamandis and Steven Kotler.
The 6Ds are a chain reaction of technological progression, a roadmap of rapid development that always leads to huge changes and opportunities.
Every industry is going to be disrupted. Either you initiate it yourself or others will.
Exponential vs. traditional organization
In order to grow, Marriott or Hilton need to find available land in suitable locations, build another hotel on it, obtain permits and licenses, and then set in motion everything else. All this requires an extensive operation in such a business. Of course, over the years they have prospered greatly and have become the largest hotel chains. And they continue to grow, but in a linear way. Their growth is based on resource scarcity, even though they set standards in their sector and are far ahead of their competitors.
“Any company designed for success in the 20th century is doomed to failure in the 21st.”
What makes these two companies different is that Airbnb is based on the principle of abundance. The world abounds with people who have an extra room in their home or who have a property they don’t live in, and it also abounds with travelers looking for a cheap and convenient accommodation alternative. Of course, they had to break paradigms first, but that is exactly what these types of exponential organizations do:
The eXo is asking questions that no one has ever asked before as it seeks to generate a new reality in its sectors.
Attributes of ExOs
The M.T.P. has to be the driving force that motivates the members of the organization to impact their environment and guides them through periods of accelerated growth. Here are some good examples of an M.T.P:
Tania F. Navarro
comprises the second part of the formula and the acronym stands for:
- Link internal objectives and external talent in a flexible and on-demand manner. Examples of applications that put this principle into action include Taskrabbit and Gigwalk.
- Build a community around your M.T.P. The idea of ExO is not for you to find your customers, but for your customers to find you. Example: TED
- as an engine for growth and learning through machine learning and AI. Google, UPS, Amazon and Netflix are probably the best examples of using algorithms to learn from their users.
- Lease available assets as needed for flexible periods of time. Examples: Amazon Web Services, wework.
- Involve people in the development of your service or product. Waze GPS is undoubtedly a good example of this, for it improves the Google Maps algorithm thanks to the collaboration of all its users.
is the third and final part of the formula and is composed of:
- The platforms that are used for interaction between users, customers and suppliers and that become the most important environment for a good UX and subsequent internal productivity. Example: Apple App Store, Google AdWords.
- Digital environments that enable ExOs to understand end-to-end organizational performance and make data-driven decisions in real time. Examples: Google Analytics or Amplitude.
Experimentation and continuous learning based on a culture that promotes experimentation, A/B testing and data science for continuous hypothesis (in)validation. Examples: Netflix and Amazon.
- ExOs are organizations based on networks of self-organized and decentralized teams that take responsibility for the business with a high degree of freedom and accountability. Examples: Zappos, Spotify, Basecamp, Valve.
- Collaborative technologies that enable teams to collaborate both internally to create their products and services and externally with their customers. It’s here that the development of the metaverse will play a key role with applications such as Microsoft’s Mesh or the future Meta workplace.
There is no doubt that the potential of exponential organizations is unlimited. And considering how technology is driving the present, with the resulting ever-faster development of society, the economy and work, then for us it is beyond doubt that in less than a decade organizations will either be fundamentally exponential or will have vanished from the scene.