Andrew Carnegie's Take on Compounding Investments in Technology

If you don't know, I have the wonderful fortune to get to spend my days helping companies use technology to accomplish their goals. Because of that, I've got a good vantage point of what the good businesses are doing. They're obviously doing all the basics correctly: service, operations, accounting, invoicing, etc. But our vantage point serving thousands of business people nationwide is this. The GREAT businesses, the ones that are growing >40% a year, are doing one thing alike regardless of industry. They're investing heavily in technology.

This is not a new thing. This goes back to the days of Andrew Carnegie.

In the evolution of business, the thread that connects Carnegie's time to our current digital age is capitalism. Business growth and the relentless pursuit of efficiency and innovation. In Carnegie's entire life and career, he had not found a single mechanism that did this better than investment technology.

"Invest in technology, the savings compound, it gives you an advantage over slower moving competitors and can be the difference between a profit and loss." - Carnegie

The essence of compounding investments in technology, much like the principle of compound interest in finance, lies in the exponential growth and power these investments yield over time.

I know this may seem super basic to most of y'all, but some businesses are still not smelling what I'm stepping in. Here's what I think those people miss: technology investments are not just expenditures that vanish on last year's P&L. They're actually compounding assets that pay dividends far beyond their initial value. Initially, benefits might seem modest—streamlined operations, improved communication, or perhaps incremental increases in productivity. BUT, as these improvements layer over one another, the cumulative effect becomes significantly more profound. Businesses that recognize and act on this potential early on can establish an insurmountable lead over their competitors. Businesses that don't tend to get left behind.

Consider the example of cloud computing. At first, it was a more efficient way to store data and access computing resources (cool enough). However, companies that adopted cloud computing early on found that it reduced their IT costs and made them more agile, enabling them to deploy new applications and services at a pace years before their competitors knew what hit them. This agility has become a necessary ability in today's fast-paced market.

Moreover, the beauty of compounding investments in technology lies in their ability to foster innovation. By freeing up resources—both time and money—these investments allow companies to experiment, to fail fast, and to innovate faster. This culture of innovation is what keeps companies at the forefront of their industries. It's not the technology itself that's the game-changer; it's what companies do with the technology that sets them apart.

However, the path of technological investment is not without its challenges. It requires a vision that goes beyond quarterly earnings, a willingness to embrace risk, and a culture that supports continuous learning and adaptation. ~If you've ever replaced software in your company, you'll know what I'm talking about~ It's about making strategic bets on which technologies will yield the most benefit and then doubling down on those bets. This approach can be daunting, especially for established companies with legacy systems and processes. Yet, business history is littered with the remains of companies that failed to adapt to technological change.

At S1 Technology? , we've seen firsthand the transformative power of technology. From startups to multinational corporations, the companies that thrive are the ones that view technology not as a cost center but as a strategic asset. They understand that each investment in technology is a building block for the future, creating a stronger, more flexible foundation and more capable of driving sustainable growth.

As I finish my rant, compounding investments in technology are essential for businesses looking to grow. They offer a pathway to not just incremental improvements but exponential growth and innovation. The key is to start—start investing, start innovating, and start building your company's future today. The journey of compounding technological investments is not a short one, but it is undoubtedly a rewarding one.