Book SummaryExponential Organizations, by Salim Ismail, Michael S. Malone, and Yuri van Geest

1-Page Summary1-Page Book Summary of Exponential Organizations

Exponential Organizations explains how to leverage new innovations in technology and business practice to build hugely successful companies. (Author Salim Ismail calls such companies exponential organizations; in this guide, we’ll call them rapid-growth companies for clarity.)

Rapid-growth companies have almost unlimited potential because they profit almost solely from information—a limitless resource that they can use more and more effectively as information technology continues to advance. In contrast, Ismail notes, traditional organizations are limited by high overhead costs, rigid top-down command structures, and the need to profit off of a...

Exponential Organizations Summary What Are Rapid-Growth Companies?

Rapid-growth companies are, in simple terms, companies that experience fast and ever-accelerating revenue growth. Whereas a traditional company might consider 5% annual growth a good benchmark for success, Ismail claims that these rapid-growth companies could double their revenue every one or two years.

This is possible because rapid-growth companies are designed to take full advantage of advancements in technology and business theory. Ismail describes companies that are small, efficient, and flexible—such organizations easily adapt to change and can quickly adjust their practices for maximum customer satisfaction and profit. We’ll discuss some of these rapid advancements in more detail later.

Achieve Exponential Growth by Standing Out

Simply taking advantage of new technology and new ideas may not be enough to guarantee exponential success, especially since countless other companies will be trying to do the same thing. In Purple Cow, Seth Godin says that a successful company must be remarkable—in other words, it must stand out in some way from its competitors, like a purple cow would stand out in a field of...

Exponential Organizations Summary Rapid-Growth Companies Thrive on Connections

Now that we’ve discussed what rapid-growth companies are and why they outperform traditional companies, let’s explore some of the specific strategies that rapid-growth companies use. First, we’ll discuss how rapid-growth companies use connection and community to boost their success.

Ismail says that integrating connection and community into every aspect of a business allows it to grow far more rapidly than organizations that don’t do so. While all companies need people in order to function (employees and customers at the bare minimum), rapid-growth companies rely on connecting with people for just about every part of their business models.

Leverage Social Connections to Grow Quickly

It goes without saying that a successful business needs to have customers. However, a rapid-growth company relies not just on loyal customers, but also on a sense of community; in other words, the company becomes part of the customer’s identity. People who feel a sense of community with your company will naturally advertise for you, helping your company to grow much more quickly and cheaply than companies that rely on traditional paid marketing.

For example, consider the rivalry...

Exponential Organizations Summary Minimize Costs, Maximize Flexibility

Another crucial strategy that enables rapid-growth organizations to outperform traditional organizations is cost efficiency—with modern technology and practices, rapid-growth companies can produce enormous revenue with minimal investment or risk. In fact, Ismail says that an entrepreneur can start a new business for as little as $100,000—in the past, such an undertaking would have cost millions.

(Shortform note: While Ismail says that it can take around $100,000 to start a business, entrepreneur Chris Guillebeau says that you can actually do so for as little as $100. In The $100 Startup, Guillebeau explains that all you really need to start a company is an idea, a website, and a way to process payments. Then, as your company grows, you can ensure that you keep turning a profit by only spending money on things that directly boost your sales and by making sure that you price your products or services appropriately. Price things based on the value your customers get, rather than how much it costs you to provide that product or service.)

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Shortform Exercise: Brainstorm a Rapid-Growth Company

Now that you understand Ismail’s ideas about rapid-growth companies and how they can outperform traditional business models, start brainstorming how you might create a rapid-growth company of your own.

What kind of rapid-growth company would you like to create? (Think about which industry you’d like to break into and how information technology could help you do so.)