In my entrepreneurial adventures, I’ve fallen flat on my face quite a few times.
But I’ve come to a realization.
There’s a compound effect in everything.
I like to say that everything builds upon itself over time.
Your job skills and good habits? They compound and build on themselves.
That mistake I made in business?
Won’t do that again! My knowledge compounds and builds on itself.
Successful People Understand The Compound Effect
Successful entrepreneur James Altucher talks about getting 1% better every day.
He’s written multiple self-help books and loves talking about the compound effect.
Steph Smith, one of the key employees at The Hustle that sold for $20M to Hubspot, wrote this post.
Her idea is that you just need to be good repeatedly to be great.
Well said, Steph, well said.
I see this as another form of the compound effect.
And New York Times bestselling author Darren Hardy wrote a book called The Compound Effect (another great read).
I’ll also share ideas from other business leaders and influential thought leaders as we carry on.
The Compound Effect by Darren Hardy
Darren Hardy wrote an entire book entitled The Compound Effect!
This article is not a book summary, but it’s a great self-help book so let’s cover a few of its essential ideas.
Darren Hardy said, “you won’t change your life until you change something you do daily. The secret is found in your daily routine.“
Or the idea that “it’s not the big things that add up in the end; it’s the hundreds, thousands, or millions of little things that separate the ordinary from the extraordinary.”
Or one of my favorites: “Small, Smart Choices + Consistency + Time = Radical Difference.”
I think you can see the idea of the compound effect all over these ideas.
Kick your worst habits, and you can start to make a difference.
Related Reading: Benefits of Having a Mentor – Read More Here.
The Compound Effect is Throughout my Projects and Work
Take this site you’re reading right now, for example.
This blog isn’t my first rodeo creating a content website.
Back in 2011, I launched a website named The Southern Investor.
It never gained momentum.
I didn’t know about SEO and very little about site-building.
I hired a website developer to build the site and logo.
All I did was write a handful of articles about real estate business deals that we did (a few of those articles remain in this site’s archives).
Since then, I’ve built more than a dozen websites.
This gave me some solid tech experience.
I was using the compound effect, and I didn’t even realize it.
My Current Website Setup
This site launched in 2013 but only acted as an online business card.
In 2019, I got serious about learning SEO and wanted to grow its traffic.
SEO + tech experience = website growth.
The compound effect.
I kept improving my good habits over time.
Now the site is making a full-time income on its own.
And it’s because I kept getting 1% better and building my knowledge on itself.
And I will continue to improve.
More Compound Effect Ideas
The more I study successful leaders, the more I find the ideas of the compound effect.
They’re weaving through every successful entrepreneurial journey.
Let’s share some more of these compound effect stories.
Here are a few more examples that include some unique success strategies.
Will Smith Had a Compound Effect Story.
Will Smith told a story in the beginning of his autobiography (before he slapped Chris Rock).
It was about how his dad made him build this giant brick wall as a young kid.
The task seemed impossible (have you ever tried building a wall brick by brick?)
But he kept at it, day after day.
It seemed like too much.
But then, one day months later, Will placed the final brick.
His father taught him the lesson of steady, continual work towards a goal.
It seems impossible in the beginning.
But in the end, you have an entire wall.
Look at what can happen with consistent effort over time!
That’s the compound effect.!!!
The Compound Effect with James Clear
James Clear gives a great example in his book Atomic Habits.
He describes how the British cycling team was terrible and then went on to become champions and win race after race.
How did they do this?
You guessed it — by using the compound effect.
They made marginal gains, got 1% better, and kept improving.
Bike seats, types of clothing, handlebars, the mattresses they slept on.
All of these things were measured and improved upon based on data.
To improve all of these at once?
But to use the compound effect and keep improving?
That’s exactly what they did, and it paid off.
Great book, by the way — I recommend having a read.
Related Reading: Top Traits Of An Entrepreneur – Click Here To Find Out.
How We’ve Used The Compound Effect in Our Businesses
Another example is our brand, The Mobile Rundown.
It’s ten years old, but it started as just an email to some friends.
Then we added a website (which I had learned how to do from my compounding experience!)
Using The Compound Effect To Expand
After being a digital brand for over five years, we decided to try a print publication.
We had never created a print publication before (a new experience!)
We learned about print design, selling print ads, and distribution.
So much knowledge to add and build upon (compound effect put to work).
The publications went well and were based around local events.
We printed four quarterly publications until early 2020, when all events were canceled due to the pandemic.
We immediately halted the event publication.
But… We Had an Idea
There was a section reserved for a non-profit organization in our print publication, and it always sold out.
In fact, it was typically pre-sold.
So we thought, “why not create a stand-alone publication highlighting only non-profits in our area?”
And with that, Do Some Good Mobile was born.
Now, we didn’t know how it would go.
But we had the experience and confidence to produce the print publication.
We stacked our experience and allowed for the compounding effect to work its magic.
Using The Compound Effect to Amplify
It was a huge success; we just completed our 4th annual publication.
In year 1, it was just a magazine.
By year 4, it included the magazine and video interviews that were turned into podcast episodes and video embeds on our blog.
Why were we able to do this?
You guessed it!
Our knowledge builds upon itself.
We got 1% better and compounded our efforts.
The compound effect!
It’s taken me a dozen years to realize that this effect is happening.
Why so long?
Well, because it’s a slow and steady process.
I once heard that people often overestimate what they can do in a year.
But they underestimate what they can get done in 5-10 years.
And I’m starting to realize this is true.
How To Make Daily Smart Choices
Each day, I decide on three major items that I’m going to accomplish during that day.
Three things that I can push forward.
Of course, I also get caught up in the day’s storm, reply to emails, and tackle unexpected ‘important’ items.
But I treat those three items as my True North of the day.
I focus on them, and if I can cross them off my list, then I’m getting 1% better.
I’m letting my actions build upon them.
Here are More Examples of How I’ve Done This
These are examples of using the compound effect in my life.
Learning to create videos >> launching a youtube channel >> sponsors & courses.
Building a personal brand >> affiliate partnerships >> SEO >> a blog as one of our income streams.
Real estate >> flip houses >> got a real estate license >> started a brokerage >> met my wife.
EVERYTHING BUILDS UPON ITSELF OVER TIME.
The Compound Effect Wrap Up
So what are you working on that has you frustrated?
Frustrated that you’re not making the gains you want.
Or you’re not moving the ball forward like you thought you would.
What you need to understand is that it’s happening.
The ball is moving forward.
Right before your very eyes.
It’s just tough to see since compounding effects take time.
Most successful entrepreneurs understand the compound effect and have patience when building their businesses.
Successful people in any aspect of life understand the compound effect.
While it seems like not much is happening, I can promise you that your root system is being developed
. [Some bamboo trees are the fastest growing trees on the planet. But what you can’t see above the ground is the time the trees first spend developing their root systems to support the future growth above the earth].
Keep using the compound effect and getting 1% better daily, and know that your bamboo shoots are preparing to grow tall and high.
Now, let’s cover some questions.
Related Reading: What Is A Vision Board – Learn How Does It Help In Meeting Goals.
The Compound Effect – FAQs
What is meant by compound effect?
It’s about getting better. It’s making minor changes to improve over time. Getting 1% better every day. And then, one day, you wake up and realize you’ve made giant gains and improvements.
What is the compound effect formula?
There’s no math equation for the compound effect. But it’s very similar to how compound interest works for money. In the first few months or years, you seem to have minor gains. Then after 5, 10, or even 15 years of consistent effort, the improvements seem to jump dramatically. Seemingly happening overnight.
Is the compound effect a good book?
Yep, there’s a book about these exact strategies called The Compound Effect. It’s written by Darren Hardy, and it’s a great read. I highly recommend it.