Friday, 21 March 2014

Compound Interest | Most Powerful Force in Universe

fig : The genius of Compound Interest

Albert Einstein once said " One of the most powerful force in universe is compound interest." No its just not an indulgence of geeky mathermaticians, but has serious implications for startups as well as career planning.

The Career Planning Narrative

We tend to massively underestimate the compounding returns of intelligence. As humans, we need to solve big problems. If you graduate Stanford at 22 and Google recruits you, you‘ll work a 9-to-5. It‘s probably more like an 11-to-3 in terms of hard work. They‘ll pay well. It‘s relaxing. But what they are actually doing is paying you to accept a much lower intellectual growth rate. When you recognize that intelligence is compounding, the cost of that missing long-term compounding is enormous. They’re not giving you the best opportunity of your life. Then a scary thing can happen: You might realize one day that you‘ve lost your competitive edge. You won‘t be the best anymore. You won‘t be able to fall in love with new stuff. Things are cushy where you are. You get complacent and stall. 
Working at your startup or any startup may allow you to reap these compounding returns of intelligence.

The Startups Narrative

Working at a startup is the closest you can get to maximizing your returns on intelligence. Think about the cross-functional skills like design, code, prod mgmt, sales, marketing, legal, ideation & financing you will be exposed to. Even if its not your prime responsibility you will be exposed to these facets.
It may take those 14 hrs shift and 80 hour weekly - but then that's the time you will require to acquire that intellect & value.

I for one seriously believe in this thought process. Do you think the same? Has your startup experience been similar ? 

PS: Thoughts mentioned here are accredited to Peter Thiel - Stanford Lecture series

1 comment:

Hustle, Grind & Flow - Learnings of a 2 year old Entrepreneur

Courtesy - I'm down for you so ride with me My enemy's your enemy Cause you ain't ever had a frien...