In a couple of presentations over the past few years I have explored the fact that our brains are not really wired to understand exponential growth and large numbers (this is a product of out evolutionary past; our mental wiring is the result of the survival pressures our ancestors faced millions of years ago and these concepts were not important in that context).
This is the reason why in my day job, in business intelligence, I strongly advocate against using logarithmic scales on charts, except with people who are used to working with them and have learned to get round our innate ability to mis-read them (and, such people in my experience are few and far between).
Interestingly, exponentials also have an effect in the financial world, where IPOs make people billionaires and national debts run into trillions of dollars.
Millions, billions and trillions are exponentials on steroids, because each is not one but three orders of magnitude (i.e. 10 x 10 x 10 = 1000) greater than its predecessor … and, we can slip from one to the other without really appreciating the difference.
In my experience, the only way to get a hold of this is to bring it back to numbers we have some sort of gut feel for.
For example, following Facebook’s IPO, last week, and given Mark Zuckberberg’s net worth, what means as much to him as a cup of coffee means to the average 28 year old? Well …
The average net worth of a 28 years old in the US is $8,525 (according to the calculator at http://cgi.money.cnn.com/tools/networth_ageincome/index.html).
So a $3.50 latte represents 0.0411% of the average 28 year old’s net worth.
0.0411% of Mark Zucherberg’s net worth is just over $8.2 million (or the equivalent of a latte a day for the next 6,427 years) !
And, even with all that, I am not sure I can get my head round the size of these numbers, if anyone has a better way I would love to know.