The 10% Rule — How Hard Work & Compound Interest Are Related

Grasshopper: “What’s the secret?”

Master: “The secret is that there is no secret — you just have to work harder than everyone else.”

In college, I had an incredible mentor, Lior Pachter, who taught me how to think about interesting problems: always redefine the rules; voraciously consume data, then just go play; cherish, pursue moments of discomfort. It was breathtaking.

But, the #1 thing I learned from Lior? The 10% rule.

Meet the 10% Rule

It’s actually very simple.

If you do 10% more hard work every day, how far ahead are you at the end of the year? Hint: It’s not 10%.

If you do 10% more work every day, you’re not ahead by just 1.1x after one year — you’re actually ahead by 1.1³⁶⁵ = 1,283,305,580,313,390x. That’s a big, big number.

1,283,305,580,313,390 vs. 1 — the 10% rule

In short, hard work compounds on itself. It’s the magic of compound interest. Just like money builds off money, hard work builds off hard work.

That extra feature you launched, email you sent, insight you had today? It builds off yesterday’s extra feature, email, insight.

Now, obviously, it doesn’t quite work perfectly. In your sleep-deprived stupor, say you start confusing Os for 0s and break the production system — you just wiped out your past month’s gains. But the idea still essentially holds.

Startups

The 10% rule is also the secret to why startups can beat the big guys.

Normal, clear-thinking people (i.e. not you, me — we’re entrepreneurs at heart) look at the numbers and bet on Google, Microsoft, Facebook. So how did Google beat Yahoo in the first place? Why did Mark Zuckerberg pay $1 billion for Instagram?

Because if you’re out busting your ass for own startup, writing code 16 hours a day, using your dog as a four-paw focus group, dreaming (literally) about product/market fit every night, the 10% rule kicks in.

And every seasoned founder, CEO knows that: it’s tough to beat talent + passion (hard work). In a year, you’ve got enough product equity to beat the 9-to-5 lifers by an order of magnitude. If you can survive long enough to catch up, they’re done for.

I’ve been clocking 100-hour weeks for awhile. I’m not special — every founder has done the same. Startups are a race against time and hard work + the 10% rule is your time-warping, 1.21-gigawatt DeLorean to win.