Monthly Archives: September 2020

Step Functions and One-percent Improvements

Business building happens by a series of 1% improvement. But business domination comes with step functions.  You can build a very good business with just the first one.  But you need both if you want to build a great business.

One-percent improvements can build a solid company.

You can build a good company with slow, constant progress. By building through a series of 1% improvements, a start-up can grow to $8M ARR in year 3, $16M ARR in year 4, $26M ARR in year 5, and $40M ARR in year 6, etc. 

Here’s what that growth looks like: 

The nice thing about continually making 1% improvements is that they have a high likelihood of success and a high likelihood of helping the business.  One can follow a playbook from other similar companies about what to do and how to up-level and make investments.  And no company can be successful without consistently making 1% improvements. 

One-percent improvements add up over a long time.

Seventy-two 1% improvements results in a doubling of the output of the company.  The faster you make these 1% improvements (OODA loops), the quicker you get to the doubling.   It works, and it can work well over the long term.

If your company could get just 1% better every day for an entire year, you’ll end up 37X better after 365 days. Writer James Clear has a great chart for this: 


That’s the power of slow, constant improvement.

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