The Exponential You

“Compounding is magic. Look for it everywhere. Exponential curves are the key to wealth generation.”

– Sam Altman

The foundational idea behind the Twenty Percenter is to fight average. Every year, average real estate professionals sell roughly seven homes and earn about $50,000. At the same time, the top 20% sell more than fifteen homes for about $140,000 GCI. And the top 1% sell close to sixty homes for almost $600,000 in GCI. (2021 full-year stats). 

The difference in their results comes from how they approach the game. 

Let’s be honest. Real estate can be outrageously competitive. Survival is hardly guaranteed. And every year, tens of thousands of agents throw in the towel. However, if an agent is talented and tough enough to stick around, their pipeline of business becomes more predictable. Referrals become clients and past clients turn into repeat clients. Incremental growth adds up. After a few years, if an average agent does well, income often climbs into six-figure territory.

Yet in that same time frame, Twenty Percenters become millionaire agents. 

Most post on social media, host events, email newsletters, and sit open houses in pursuit of individual deals. Twenty Percenters do the same activities in pursuit of volume business. They are investing in databases and farms for exponential returns, not one-to-one returns. Activities don’t happen in isolation, but rather in concert. They build on yesterday’s successes and reap outsized rewards.

Success comes in two flavors – linear and exponential. To illustrate the difference, we can compare how two hypothetical agents chose to build their businesses.
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Agent John interacts daily with his sphere on social media. He hosts a pie day event every fall at whatever location is easiest to book. He emails his sphere regular market updates with stats provided by his MLS. He dutifully sits open houses twice a month. He’s a hustler and works hard. His activities add up and yield results. And each year his business grows by 10-20%. But it’s linear growth. 5 + 2 + 3 + 4 = 14. 

Meanwhile, Agent Alisha works her sphere daily. But unlike John, she always signs off as “your Knollwood Heights Expert.” She gets her title company to get her demographic and contact info for Knollwood Heights. She sends all 600 residents Just Listed, Just Sold, and neighborhood specific market updates. She leverages her neighborhood database to drive traffic to her pie day at the Knollwood Heights Elementary. She sits open houses, but only in or close to her chosen zip code. Alisha’s business matches John’s in year one. But in year two, she grows by 30%. And the next year by 40%. What’s the difference? She incorporates her activities into a “neighborhood expert” strategy. She achieves exponential growth. 5 x 2 x 3 x 4 = 120. 

Stop rolling your eyes. I know being a neighborhood expert is hardly revolutionary. In fact, it’s the oldest game around. Why isn’t everyone wrapping their work in a simple strategy like this to yield more business over time? When we surveyed top agents for The Millionaire Real Estate Agent in 2002, most ran a farm-based or database-driven business. 

In 2022, some still do. What they all have in common are a few lead sources that S-C-A-L-E. They run a database business, work a farm, invest in PPC or internet leads, run TV and radio ads, etc. In surveys, their top four sources account for 81% of their business. 
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When you approach the core parts of your business–leads, listings, and leverage–with exponential results in mind, your efforts yield greater and greater results over time. Compounding isn’t just for 401ks. It can be a part of almost everything you do.

To be a Twenty Percenter, abandon linear approaches for exponential ones. Only play exponential games. 

One question to ponder in your thinking time: Where in my life and work am I settling for linear results when I could choose exponential?

Make an Impact!
Jay Papasan​

​Co-author of The One Thing & The Millionaire Real Estate Agent ​