Exponential growth can bring unexpected results. How did the long-predicted “Year of Mobile” pass us by?
An Ofcom report today shows that for the first time the majority of internet usage is coming from mobile devices. For some time it’s been a running joke in the media industry that it’s perpetually going to be “The Year of Mobile”. It seems like the year of mobile is now decidedly behind us. After all, Ofcom has declared that the UK is now a “Smartphone Society?”
How did we go from constantly predicting the Year of Mobile to staring at it in the rearview mirror? The answer lies in exponential growth.
Smartphones have become the most widely owned internet-enabled devices, alongside laptops. In Q1 2015 smartphones were present in two-thirds of households (66%), on a par with laptops at 65%. – Ofcom report
Exponential growth can be a tricky concept for us to get our heads around. That is, it’s simple enough to understand in theory, but it’s not always easy for us to visualise. A familiar example of this is the ‘place a penny on a chessboard and double it for each square’ problem. Before long you’ve got more money than has ever or will ever exist, even though all you did was start out with a measly penny.
How exponential growth works
A simple, day-to-day example of exponential growth is compound interest. You deposit some money in a bank account, and you get interest on that money per month or per annum at a percentage—say, 1% interest per month. But this additional 1% doesn’t apply only to the original amount you put in. It’s compounded, because every month it takes a total amount including the interest you’ve already accumulated, and adds 1% of that new total.
Over time, in this example, you would see steady growth of your bank account balance. But the result of exponential growth can be a lot more drastic. Chris Martenson came up with a now-famous example of the “magic eye-dropper” to describe how it works. Imagine you have an eye dropper and you place a single drop of water in the middle of a large sport stadium. Every minute, the amount of water added from the magic dropper doubles.
If we assume a drop of water is 0.05mL this would mean in minute one 0.05mL was added to the pitch. About enough to bend the tip of a blade of grass. At the next minute 0.10mL are added to the pitch. In minute three 0.20mL. And so on. Assuming for the sake of the example that the stadium is watertight, how long does it take for the stadium to fill up?
Using Martenson’s example of the Yankee Stadium, he says it takes about 50 minutes. But for the first 45 minutes, the volume of water isn’t very noticeable, or it doesn’t seem like much of a threat—the field has maybe about five feet of water by the 45th minute.
It’s in the last five minutes that the stadium suddenly, rapidly, fills up, leaving you with very little time to escape.
The point of this example is not only to show how exponential growth works, but to demonstrate how it can take us unawares, and how we might not be able to react in a timely manner when it happens. By the time we’ve noticed the growth, the window of opportunity to react to it is very nearly gone.
“The Year of Mobile” Conundrum
With the onset of new technology and the impact this can have on commerce, the result can be similar. For years, we’ve been predicting that next year would be “the year of mobile”, the time when the shift to mobile for media would really happen in a critical way. And yet what if, in the blink of an eye, this event is already behind us?
According to the logic of exponential growth, this could happen almost instantly. That’s because, even though we’ve had our eyes on the growth of mobile, just as we might have been watching the magic water expand in those first 45 minutes in the stadium, we might not truly comprehend the rapid geometric growth that takes place in those last few moments. We keep expecting “the year of mobile” to happen when the critical moment might, in fact, have already happened.
This is why, when it comes to mobile, most of us already feel like we’re playing catch-up. But as marketers, we need to ready ourselves for the surprises of exponential growth and be able to prepare and react accordingly.