How To Be An Idea Compounder: Definition, Examples, and More
The ideas you learn compound over time. One idea doesn’t stay as one idea - it gets mixed with other ideas and produces new ideas on top of each other.
I call this process idea compounding and those who do this actively idea compounders.
What’s An Idea Compounder?
An idea compounder is someone who layers ideas on top of each other to find new ideas and ways to apply them. They understand that:
1 idea + 1 idea ≠ 2 ideas. It equals 3+ ideas.
They combine ideas from different niches and disciplines to create new ones and experiment with the application. And they do so very actively because they understand the value of compounding ideas over a very long time.
Ideas Compound Like Interest.
When you invest your money in a business, the business compounds your wealth by reinvesting any interest or earnings it generates to create even more gains. So not only are you compounding your initial investment, but you are also compounding all the interest or earnings you accumulated in the past.
Compounding ideas works in the same way. When you add a new idea to your idea stack, it compounds every concept that has come before it by changing and updating older static ideas into new ones.
Over the very long term, the results are staggering. You’ll end up building an ever-changing idea framework that’s capable of handling and making sense of any idea you throw at it.
Compounding Ideas Will Help Get You Where You Want To Go.
Why should you start compounding ideas? Because it will help you understand and navigate the world.
Think of it like this:
Every idea you add and connect is creating a secure link in what becomes the frame of your life. And this frame of interconnected ideas is all pushing in the same direction - toward whatever it is you want out of life!
The more ideas you can add and compound, the stronger your frame and the faster you’ll move toward your goal. You’ll start to understand the world through this framework. New ideas will instantly connect to something else you already understand, adding another piece to your frame.
The more ideas you compound, the faster you’ll move in the direction you’re facing.
Examples of Idea Compounding.
Asymmetric Opportunity + Rare Event = Positive Black Swan
Take a concept like an asymmetric opportunity. This is an opportunity where the upside is much greater than the downside.
When you take this idea and stack it with hugely consequential rare events (“Black Swan” events), you don’t just have two ideas. A third idea emerges: a positive Black Swan (from Nassim Nicholas Taleb).
A positive Black Swan is an unpredictable, highly impactful event where the upside is unlimited while the downside is capped. It’s an important concept because to generate wealth, you want to operate in areas of positive Black Swans.
And we get there by combining two ideas: 1 idea + 1 idea = 3 ideas, not 2. That’s idea compounding.
Sales + Psychology = Scarcity + Social Proof
Here’s another example from sales and psychology. I’ve written a lot about the mental biases that we all suffer from. These include incentive-caused bias, social proof, scarcity bias, and loads more.
When you view these biases through the lens of trying to make sales, they transform into powerful compliance techniques.
For example, if you spend any time on Twitter, take notice of how many “influencers” use a scarcity tactic to help sell their products.
Scarcity is the idea that people value “scarce” opportunities more than they value abundant ones. The most common tactic is adding a time limit to a sale. There’s also the limited availability tactic or a limited availability at a specific price point tactic (only the first 25 people get the product at $X price).
Social proof can be another powerful sales technique. You can sell more products when you have ample social evidence from other people claiming how great the product is. Here’s an example I created for my content:
Both of these (highly effective) tactics come from bending the light of natural psychology through the lens of sales. This is idea compounding.
The best way to compound ideas is to write.
Writing is the most effective way I know to compound ideas.
Writing merges the idea with your brain.
When you write, neurons in your brain light up like stars in the night sky. That’s your brain merging with the idea. That’s why it is far easier to speak about things you’ve written about - the ideas are more readily accessible because they’re “burnt in.” And the more ideas you can readily access, the more idea compounding you can do.
Writing creates a permanent representation of the idea.
When you write, the idea leaves the fluid, ever-changing, unreliable realm of your mind and becomes something concrete. It becomes permanent. And now, you can more easily examine it, compare it, and compounded it with other ideas.
A personal or professional blog is nothing more than a database of compounding ideas. Often, I come up with new ideas to write about just by going back to older articles and reframing them with something new I’ve learned.
If you want to start compounding ideas, start writing.
Compound Ideas Across A Few Niches You’re Interested In.
It helps to pick a few areas of interest and start compounding ideas in those areas. This stops you from getting overwhelmed by the infinitely deep well of the world’s recorded ideas.
Here are my three niches:
Wealth Creation
Thinking Better
Online Content
Picking Niches
My journey started when I found Charlie Munger. He opened up two areas of intense interest for me: wealth creation and how to think about the world.
I created Wealest.com to actualize my obsession with these topics and burn the ideas into my mind by writing about them.
From there, I found Naval Ravikant. While Charlie Munger is “old money,” Naval Ravikant is “new money.” He made me fully realize the potential of digital, scalable online media to help create wealth.
Plus, I have a lot of experience working in the digital space already. I’ve created internet content (written & video) for major brands like Toyota, Alfa Romeo, John Deere, and many others. I also built Wealest.com from the ground-up, so it made sense to add online content as a niche.
The area where these niches overlap in the center of the Venn diagram is my playground for compounding ideas.
Niches Help Focus Your Content
Niches are helpful because they create an instant filter for the ideas I examine and the content I produce. If an idea doesn’t touch any of these niches, I don’t spend time on it.
This also helps with audience building. My audience knows what to expect when I put out content. It’s always going to connect to one of these three niches (and usually more than one).
So pick a few niches and start compounding.
Summary of idea compounding.
The ideas you learn compound over time. One idea doesn’t stay as one idea - it gets mixed with other ideas and produces new ideas on top of each other.
I call this process idea compounding and those who do this actively idea compounders.
Idea compounding helps build a framework to better understand and navigate the world. The more ideas you compound, the stronger your frame, and the more additional ideas it can handle.
Writing is the best way to compound ideas. First, pick a few niches you’re interested in, learn the basic concepts from those niches, and then start compounding.
Start now!