In a resource-dependent system, the capital growth rate is a high-leverage parameter

The stronger the reinforcing loop of capital growth (the capacity to extract the resource) the faster the resource will deplete and the harder capital will fall.

If we keep capital growth small, then the rate of extraction allows for a stable depletion of the resource with respect to the capital.

Napkin example: let's say 1 unit of capital consumes 1 unit of a resource. There are 10 units of that resource and we start with 1 capital:

  • If capital grows at 5% per year, it will take around 8 years for the resource to finish and capital ends up being 1.55.

  • If capital grows at 1% per year, it will take around 9 years for the resource to finish and capital ends up being 1.10.

  • At 1% growth, the resource lasted 12% more and there is 40% less wasted capital at the end.

This is a good argument on why aiming for a Company of One can be more sustainable and compatible with an individual's goals. If a company starts taking in investment rounds, bigger growth is expected, which requires more work and more money, which then attracts more investors and so on. Capital grows faster and faster. If the market can't support the growth, the company fails in proportion to its capital.