Preferential Attachment
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Today we will explore the idea of preferential attachment.
What is preferential attachment?
A class of processes in which some quantity, typically some form of wealth or credit, is distributed among a number of individuals according to how much they already have is called preferential attachment.
This happens so that those who are already wealthy receive more than those who are not, thereby creating a self-fulfilling cycle.
To understand this, let’s look at the example of marathon running.
Typically in a 10 mile run, energy bars and water are distributed after 3-4 miles.
As a result, the ones who reach 3-4 miles first get the refreshments and can move faster than those who are behind them.
The ones who are not as fast will get their refreshments later and the gap between them and the faster ones will be higher than what it would have been otherwise.
Wealth of the Wealthy
This idea is also prevalent in economics.
People who are wealthy will have more opportunities to invest their wealth to generate more wealth and keep this cycle moving.
On the opposite side, the ones who are poor have fewer investment opportunities and as a result they don’t generate wealth at the scale that wealthy people do.
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Preferential Business Strategy
When running a business, you would be wiser to consider industries that are well backed and have been in the business for longer (Read Lindy Effect).
Wealthier/high margin industries have the ability to take losses, invest in R&D, hire good talent, expand into newer markets etc whereas companies which have low margins will likely suffer from low risk taking capacity, little to no investment in research etc.
Companies that have been doing well are often also rewarded for their growth by investors, employees and local governments and this in-turn fuels their growth even more.
Personal Development Preference
If you are interested in self-improvement, start by focussing first on goals where you have a head start. As you get better and better with that one goal you will likely be rewarded with more resources for it which you can use to get better at other things.
For example, if you’ve been looking to exercise regularly and start saving money at the same time, try and focus initially on what you have an easier time following.
Maybe, it is easy for you to hit the gym 5 times a week.
And if you do, as a result you’ll soon build an appetite for healthier food options and you can start cutting junk food (by extension processed food & eating out) which will help you save money.
You’ll also be spending time at the gym more so you might be able to cut down on entertainment costs that might have otherwise piled up.
Countering Adverse PA in Business
If you are running a business and looking for better returns, it is natural for you to focus on those leads that have progressed through the sales funnel.
However, you would be wise to not ignore those who are not far along in the sales funnel. As they get to know more and more about your product/business and what it can do for them, they are likely to move favourably towards a sale.
This is true for more or less any function of a business be it hiring, operations, engineering etc.
So that is it! What are your thoughts on this concept?
Let me know by replying to this email.
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