Linear Thinking
Linear thinking in the investment space is limiting. Heading up growth and marketing in the Fintech space I saw firsthand how the industry evolved, and it did not wait for those moving at a steady, predictable pace. In a space driven by digital innovation, thinking in a straight line doesn’t just hold you back; it threatens to leave you behind entirely.
The Shifting Landscape of Online Brokerages
By the end of 2022, it was clear that the entire investment industry had undergone a seismic shift. From retail traders doubling during the pandemic to fintech players offering seamless, low-cost trading solutions, the numbers were impossible to ignore. The industry saw unprecedented growth, with online brokerages experiencing double-digit percentage increases in new accounts and trading volume in record time. But here’s the thing: this growth wasn’t linear. It was exponential.
Linear vs. Exponential Thinking in Fintech
In our industry, linear thinking follows a traditional trajectory. It assumes steady, predictable increases—more accounts, more trades, more revenue, one year at a time. But exponential thinking? It’s about compounding growth. The industry as a whole has experienced rapid adoption in the last three years, driven by shifts in user behavior, technology, and market accessibility. In the exponential model, each new user isn’t just an addition; they’re a multiplier.
And for me, coming from a science background, exponential growth is almost intuitive. In chemistry, growth rarely moves in a straight line—reactions, populations, and ecosystems all develop in curves and surges. This perspective brings a unique clarity when applied to growth and strategy; it’s like seeing a pattern where others might only see points. It’s not about “knowing more,” but rather about understanding the natural behavior of systems—recognizing that compounding change is inherent, even if we’re not always primed to notice it.
Real-World Models: Linear vs. Exponential Growth in Online Brokerages
To understand the gap between these growth models, let’s look at industry-level data:
- Linear Growth: For traditional institutions, growth followed a steady incline. Before the fintech boom, brokerages might have expected a fixed increase in new accounts, let’s say 5-10% year over year, based on predictable drivers like economic trends or market performance.
- Exponential Growth: The past few years rewrote the rules. From 2019 through 2022, online brokerages in Canada saw user growth rates as high as 30% year over year. This surge wasn’t incremental—it compounded. Each wave of new users encouraged the next, fueled by pandemic-era interest, ease of online access, and platforms for direct customers simplified market entry.
This compounding effect is evident in the sheer volume of new accounts and increased trading frequency across digital platforms. By December 2022, industry data showed that trading volume at online brokerages was over 60% higher than pre-pandemic levels. Traditional models didn’t—and couldn’t—anticipate this level of growth.
The Key Shifts That Make Exponential Thinking Essential
So why does exponential thinking matter in our GTM strategy and in the broader industry? Here’s how it shapes everything from user acquisition to market timing.
1. Scaling to Meet Unpredictable Demand
In 2022, exponential growth wasn’t a “nice to have”; it was a make-or-break factor. We saw new accounts and trading volumes that required an infrastructure built for rapid scalability. Linear thinking would have had us adding resources slowly, as demand increased. But exponential thinking required a cloud-based, scalable system ready to handle unpredictable spikes without missing a beat.
Exponential growth demands foresight and agility. During market surges, users expect instant access, which means investing early in flexible, resilient infrastructure. It’s a different mindset: you’re not just preparing for steady growth—you’re building for sudden, massive inflows.
2. Adapting CAC and Retention for the Exponential Age
In traditional models, CAC (customer acquisition cost) remains relatively stable. But in an exponential landscape, CAC shifts dramatically as market interest surges. In 2022, a major part of our strategy was understanding and capitalizing on network effects. When new users bring in friends, family, and colleagues, acquisition costs drop significantly, while retention efforts become more about creating a seamless, integrated experience.
This compounding growth means we’re not just adding users but maximizing the potential of every user’s network. It’s a shift from individual acquisition to ecosystem growth, where each customer’s presence encourages the next. Retention, then, relied on a community motion - not just keeping accounts open, but also maintaining a community that drives ongoing engagement.
3. Moving Fast to Capture Market Share
In the digital brokerage space, speed matters. Linear thinking would have had us roll out new features slowly, gauging market reaction over time. Exponential thinking meant we went full throttle on product updates, launching faster, learning faster, and adapting faster. In 2022, the race to innovate wasn’t about meeting customer expectations—it was about surpassing them before competitors could catch up.
Consider the new features that became “standard” this year: real-time AI insights, crypto trading integration, zero-commission trades. Staying relevant demanded constant adaptation, not just to industry standards but to user expectations that were constantly on the rise.
The Bottom Line: Linear Thinking is Expensive
As we wrap up 2022, the lesson is clear. Linear thinking has no place in an industry driven by exponential growth. To lead, we had to think big—beyond single-digit growth rates and steady customer inflows. Exponential thinking shaped how we built, scaled, and executed our GTM strategy. It’s a mindset shift that doesn’t just account for today’s growth but anticipates tomorrow’s potential and lays the groundwork for ongoing adaptability.
Linear thinking might have worked in a predictable world, but in today’s digital-first market, it’s a liability. The only path forward is one that scales rapidly, evolves constantly, and anticipates the unknown.