Riffing on Alex Komoroske’s excellent set of cards on compounding loops, there’s something really interesting about the relationship between compounding loops and properties of a theory of change. A compounding loop makes an excellent motor: every cycle produces a bit more value. At the same time, a rudder tends to dampen a compounding loop: just like with any OODA loop, we will need to zig and zag, introducing variability into the compounding process. And as Accounting 101 teaches us, variability diminishes compounding returns.
If my theory of change relies on the same compounding loop to serve both as a motor and a rudder, I will start experiencing a weird tension that I call the growth/control tension.
This tension arises from the two opposing forces. There’s the force of growth that comes from my wish for the compounding loop to continue acting as the motor in my theory of change. There’s also the force of control, which is an embodiment of my wish to use it as the rudder. This might be a really terrible analogy, but it’s kind of like riding one of those front-wheel pedal tricycles: choose between going fast and steering as little as possible, or turning and breaking the pedaling rhythm — can’t do both. In a single-compounding loop theory of change, trying to control impacts growth and focusing on growth means losing some control.
Developer ecosystems are very commonly subject to this tension. To get more developers (growth), I want to listen to their needs and ship stuff that satisfies them. To move an ecosystem in a certain direction (control), I want to change what developers do, which means that some of them won’t like it. If I don’t recognize the control/growth tension, I might end up see-sawing from one extreme to the other, or worse yet, find myself paralyzed by indecision: do I take the developer sentiment hit, or do I stay in the past? I have done both, and these aren’t on my list of happy places.
If you’re lucky, you can diversify: there is another low-correlation compounding loop in the ecosystem that you can lean onto, to separate your motor and rudder from each other. Otherwise, you are stuck riding the tricycle, dynamically resolving the growth/control tension. It’s not so bad, but it does take a lot of practice.