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What Is 'Autocatalysis'?

Autocatalysis is a reaction whose output produces the raw materials necessary for an identical reaction.

An autocatalyzing system will produce the inputs needed for the next cycle as a by-product of the previous cycle. This results in a positive, self-reinforcing Feedback Loop, where the system will grow until the system changes and produces less output.

Example: money spend in direct marketing that brings in more revenue, which the company spends on more more direct marketing, which brings in even more revenue.

If your system has an autocatalyzing element, it'll grow more quickly.

Josh Kaufman Explains 'Autocatalysis'

Autocatalysis is a concept that comes from chemistry: it's a reaction whose output produces the raw materials necessary for an identical reaction.

An auto-catalyzing system produces the inputs necessary for the next cycle as a byproduct of the previous cycle, amplifying the cycle. Autocatalysis is a Compounding, positive self-reinforcing Feedback Loop-the system will continue to grow until the system changes in a way that produces less output.

Television advertising in the 1950s-1990s is an excellent example of Autocatalysis. Companies could spend $1 in advertising, and via increased demand and distribution, get $2 or more in return. That $2, re-invested in advertising, became $4, which became $8, which became $16, etc. Companies like Procter & Gamble, GE, Kraft, and Nestle used this cycle to become the behemoths they are today.

Today, $1 invested in television advertising is lucky to return $1.20-there are fewer channels, advertising is more expensive, and people have the technology to filter out unwanted distractions. The loop still works in some circumstances, but it doesn't work as well as it used to.

Autocatalysis doesn't always have to be money: "network effects" and "viral loops" are also examples of autocatalysis. Every time someone signs up for Facebook, they'll naturally invite even more users to the network. Every time someone sees a funny video on YouTube, they'll pass it along to several friends. That's Autocatalysis.

If your business includes some autocatalyzing element, it'll grow more quickly than you expect.

Questions About 'Autocatalysis'

• How can you build an autocatalyzing loop into your business structure?
• What can you do to ensure that every new customer you have makes it easier to attract even more customers?

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"The system that will evolve most rapidly must fall between, and more precisely on, the edge of chaos—possessing order, but with the parts connected loosely enough to be easily altered."

E. O. Wilson, systems theorist

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