The Miracle Of Compound Knowledge

“You cannot create experience. You must undergo it.” – Albert Camus (Notebooks, 1935-1942)

I have a little gift for you. A simple idea that can make a big difference in your life. It can mean the difference between struggling through an ordinary life or being immensely successful. It is a very small thought that is worth a very great deal to you if (a) you really understand it and (b) you make it a part of your life.

The idea in a nutshell: Knowledge is a form of wealth. Like wealth, it provides dividends if it is invested. Over a long period of time, those dividends compound. Eventually, they become gargantuan.

Let me explain.

I’m working with two clients right now who are in exactly the same business. One (let’s call him George) has been in business for four years; the other (Ted) has only 18 months of experience. That 30-month difference has given George some extra knowledge that Ted is missing. Other than that, they are both on an even footing: Both are bright, both are hard working, and both are good marketers.

Yesterday, I sent each of them the same memo — one suggesting a specific promotional strategy they could benefit from.

I want them both to succeed. If I had my druthers, they would each benefit equally from my memo. I know, however, that they won’t. George will get much more out of this idea than Ted will.

Why is this?

Simply because George’s knowledge has been compounding for30 extra months.

First, George will understand my memo better. He will getthe big picture immediately, because he has seen it before. He will understandand remember the details, because they will be more familiar to him. He will beable to quickly take my suggestions and translate them into decisions that canbe communicated and implemented quickly.

Ted will spend some time wondering if my idea is really all that good. Since he has less experience to judge it by, his natural (and sensible) skepticism will come into play. He’ll think about it for a while, ask me some questions, have some doubts, etc.

This is all well and good, but it puts Ted on the slow track.

While George is turning the idea into a promotion, Ted will be struggling to understand it. By the time Ted has figured it out and puts a plan into place, George will be getting results on his first test and will be making the adjustments needed to roll it out.

George’s extra knowledge is not just personal. He’s developed a staff that is taking advantage of that extra, compounded wisdom. They will “get” the idea faster and will more quickly understand how to implement it, fill the holes, and repair the cracks. They will push all the specifics forward at a much faster rate than Ted’s people will — even though Ted’s people are just as smart, hardworking, and motivated.

 Here’s the point:

Knowledge is not static unless you do nothing with it.

If you take an idea and plant it — not just in your mind but in the operations of your business — it will start to grow. What seems like an insignificant seed today will look like a healthy tree in a few years time — and a huge, towering oak in 10 or 20 years.

When someone gives you a valuable idea, do something with it immediately. If you are inexperienced, don’t expect it to change your world — but put it to work anyway, because it will become more valuable over time.

Value good advice. Put it to work immediately Cultivate it over time. As the months and years pass, crossbreed it with other new ideas. As time goes on, your capacity to use new ideas will grow enormously.

One day in the future, what seems hard today will seem easy. An idea that makes you $500 today will make you $50,000 or $5 million. It will be the same idea, but it will be much, much more powerful — because you will be more powerful. You and your business will have grown like an oak tree.

Note: If you understand what I just told you, you can appreciate the following paradox: Although Ted gets less from the idea today than George does, his potential for getting more from it is just as great — because he will let that idea grow an extra 30 months later on. (I’m assuming they each end up in business for the same amount of time.)

[Ed. Note.  Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]