The mind is bad at exponential change
In a January 2025 talk on AI tools, Richard called one slide among the most important of the day. The topic was exponential growth in AI. He opened it with a point he credits to Warren Buffett.
Buffett's point
Richard says Buffett notes that the human mind is really bad at understanding exponential change. People expect next year to look like last year, plus a little.
Looking backward
Richard shared an idea from a Tim Ferriss interview with Silicon Valley investor Chris Sacca. Most people look at AI by looking back at what has already happened. Turn around and look forward, and the curve looks like a wall going straight up.
What Richard did about it
Richard said the number of AI startups had grown from about 56,000 to over 70,000 in a short time. Before that mastermind he tested another 150 to 200 tools himself.
In Richard's words
"And Warren Buffett says that the human mind is really bad at understanding exponential changes." (Richard C. Wilson, Family Office Club talk, January 2025)
"And so that's how exponential, that's why exponential is hard to understand." (Family Office Club talk, January 2025)
How to use this
- Plan for how fast a trend is speeding up, not just where it is.
- Test new tools in your field on a schedule.
- Ask what your business looks like if a trend doubles twice.
- Be wary of forecasts that just extend last year's line.
Questions and answers
What did Buffett say about exponential change?
Richard says Buffett notes the human mind is really bad at understanding it.
Why does this matter for AI?
Richard argues AI is growing so fast that looking backward makes people underestimate it.
How many AI startups were there?
Richard cited growth from about 56,000 to more than 70,000 at the time of the talk.
What did Richard do to keep up?
He said he tested another 150 to 200 AI tools before the event.