The Natural Rate of Growth
Everything has a natural growth rate, and pushing past it breaks the whole system
- Difficulty
- Moderate
- Time to result
- ~ongoing to results
- Steps
- 5
- Confidence
- 72%
Housel's model states that investing, businesses, and relationships each have a natural rate at which they should grow, and trying to push past that rate reliably breaks the system. It is the Robert Wadlow problem applied to organizations: you cannot double the size of a human — or a startup — and expect double the output, because doubling can shatter the mechanics that made the smaller version work. For most investors the natural rate is roughly 5-10% a year; the intuition to accelerate from 10% to 20% to 40% blows up ten times out of ten. The trap is asymmetry of visibility: last year's extra 10% is observable and seductive, while the blowup risk it creates is a hidden metric until it detonates. Stay in the sustainable zone and you win the game.
Origin
Drawn from Morgan Housel's Same as Ever, tying together his 'too much too soon' chapter, the Robert Wadlow story, and his investing maxim that the fastest way to get rich is to go slow.
Core principles
- 01Anything worth building has a natural rate it grows at
- 02Force growth past that rate and the system collapses
- 03Doubling size does not double output — it can break the mechanics
- 04Blowup risk is hidden; last year's extra gain is observable
- 05The fastest way to get rich is to go slow
How to run it
- 1
Find the natural rate
Determine the sustainable pace for the thing you're building — for most investors roughly 5-10% a year, for a startup a headcount and culture cadence it can absorb.
- 2
Resist the acceleration intuition
When a strategy works, the instinct is to do it faster. That instinct is the danger. Blitz scaling usually becomes blitz failing.
Pro tip The fastest way to get rich is to go slow.
Watch out Pushing 10% to 20% to 40% blows up ten times out of ten.
- 3
Respect the doubling-breaks-mechanics rule
Doubling size doesn't double output. A startup going from 20 to 100 employees changes culture, hiring, and rules — and can kill what made it work.
Pro tip Very large animals have giraffe legs or rhino legs; scale a medium-legged human and it collapses.
- 4
Price in the hidden blowup risk
The extra gain you got by pushing is observable; the blowup risk you created is hidden until it detonates. Weight the invisible cost properly.
Watch out Don't hit the one red button — the single thing that ends the game.
- 5
Stay in the zone for a lifetime
Keep the sustainable rate going across a full lifetime and you win the game; the people who push beyond it end up as the losers.
In the wild
Around 15 years ago Starbucks pursued a growth binge as if every street corner needed two stores. It oversaturated, degraded the Starbucks experience, and hit a low around 2007, forcing it to pull way back to whatever its natural store count should have been.
→ Forced retreat after growth outran the natural rate.
Kalanick had exactly the right personality to take Uber from zero to 100, and was arguably the worst person to take it from 100 to a thousand. The traits that fit one growth phase were disastrous at the next scale, and he was pushed out.
→ A personality that scaled one phase broke at the next.
Common mistakes
Accelerating a working strategy
Turning a good 10% strategy into a forced 20-40% chase pushes past the natural rate and blows up almost every time.
Treating scale as free
Assuming doubling size yields double output ignores that the mechanics — of a body, a startup, or a brand — often break when doubled.
Is it for you?
Best for
Investors, founders, and anyone tempted to force a working strategy faster.
Not ideal for
Situations that genuinely reward blitz-speed land-grabs with no structural fragility.
From the transcript
“the fastest way to get rich is to go slow”
“with blitz scaling usually comes Blitz failing”
“you can't just double the size of something and expect double the output sometimes when you double size the whole system collapses”
From the episode
9 Timeless Lessons About Human Psychology - Morgan Housel - #707
Morgan Housel