Superlinear Returns

Authors

Paul Graham

Tags

Top Highlights

• One of the most important things I didn't understand about the world when I was a child is the degree to which the returns for performance are superlinear

• You can't understand the world without understanding the concept of superlinear returns

• the main advantage is that by focusing on growth rate you tend to get something that grows exponentially

• The more you know, the easier it is to learn new things

• The other source of superlinear returns is embodied in the expression "winner take all."

• It's remarkable how often a situation with one source of superlinear returns also has the other

• if you do, you get first crack at all the new discoveries to be made in it

• one reason Silicon Valley is so tolerant of failure

• Don't limit yourself to learning things that are already known to be valuable

• if you come across something that's mediocre yet still popular, it could be a good idea to replace it

• The prospect of superlinear returns for performance is an exciting one for the ambitious

• There are more types of work in which you can get superlinear returns, and the returns themselves are growing.

• superlinear returns for performance are a feature of the world, not an artifact of rules we've invented. We see the same pattern in fame, power, military victories, knowledge, and even benefit to humanity. In all of these, the rich get richer.

• the companies with high growth rates tend to become immensely valuable, while the ones with lower growth rates may not even survive

• Newton's discoveries were arguably greater than all his contemporaries' combined.

• Y Combinator encourages founders to focus on growth rate rather than absolute numbers.

• What are fields where a few big winners outperform everyone else? Here are some obvious ones: sports, politics, art, music, acting, directing, writing, math, science, starting companies, and investing.

• If your product is only half as good as your competitor's, you don't get half as many customers. You get no customers, and you go out of business.

• if you're ambitious you definitely should, because this will be the wave you surf on

• two fundamental causes: exponential growth and thresholds

Toughts & Comments

Kazuki

"Take as much risk as you can afford; if you're not failing occasionally you're probably being too conservative. Seek out the best colleagues. Develop good taste and learn from the best examples. Be honest, especially with yourself. [...] When in doubt, follow your curiosity. It never lies, and it knows more than you do about what's worth paying attention to."