Great example to support your thinking. I hope that I understand that correctly - you are saying that product as a some bigger thing then some code is the main thing startup should focus on, and you have to get >1 in "expirience" with it? :)
"E(N)" is not experience but "expected value." The expected value of the number of fissions caused by a fission must be greater than 1, then you explode.
Basically, suppose you can market more. Each time you market a given amount M, you create a new convert. 2M, two new converts. 3M, three new converts.
As E(N) gets close to 1, these converts create their own new converts. There's a sort of multiplying factor for the final number of converts if E(N) < 1, it's 1/(1 - E(N)).
So if every convert ends up converting, on average, 2/3 of a new convert, then M now generates 1/(1 - 2/3) = 3 converts total. That's a multiplication of your investment in marketing by 3. So you can spend one third the marketing money! If you can boost this rate from 66.7% to 80% your marketing becomes 5x more effective. If each convert creates, on average, 0.9 converts, you're now 10x more effective with your marketing money. The moment you get to 1.0 or higher, the system goes viral and spreads to everyone with no investment necessary (think Wikipedia, Google, Facebook).
Comments
Great example to support your thinking. I hope that I understand that correctly - you are saying that product as a some bigger thing then some code is the main thing startup should focus on, and you have to get >1 in "expirience" with it? :)
"E(N)" is not experience but "expected value." The expected value of the number of fissions caused by a fission must be greater than 1, then you explode.
Basically, suppose you can market more. Each time you market a given amount M, you create a new convert. 2M, two new converts. 3M, three new converts.
As E(N) gets close to 1, these converts create their own new converts. There's a sort of multiplying factor for the final number of converts if E(N) < 1, it's 1/(1 - E(N)).
So if every convert ends up converting, on average, 2/3 of a new convert, then M now generates 1/(1 - 2/3) = 3 converts total. That's a multiplication of your investment in marketing by 3. So you can spend one third the marketing money! If you can boost this rate from 66.7% to 80% your marketing becomes 5x more effective. If each convert creates, on average, 0.9 converts, you're now 10x more effective with your marketing money. The moment you get to 1.0 or higher, the system goes viral and spreads to everyone with no investment necessary (think Wikipedia, Google, Facebook).