Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it. – Albert Einstein
In business, and particular in the world of startups, we like to refer to our growth as a percentage. “We’re showing double-digit monthly growth.”, or “We’ve grown 150% since last year”. Have you ever stopped to think about why a relative metric like percentage is so frequently used over an absolute one? The actual growth is the same whichever form is used to communicate it, so why do we so often lean towards the relative framing? I’m sure there are many reasons for this, but I think in the world of startups there are two main ones.