Ever heard of the USA? If so, chances are very good that mentioning that very simple series of letters ‘unpacked’ an entire country into your present consciousness. And now I’m able to reference a stunning amount of information simply with a couple characters! And that is what I want to talk about.

I got the original concept from Eben Pagan, who rightly says that labeling a concept multiplies its power at least 10 fold (that’s a conservative estimate). I’ve consistently found that ideas I share that have a good name or label are more “sticky” and memorable. And that they eventually become embedded in the thinking of the listener, which can be tremendously powerful on their actions and of course results. But it doesn’t stop there.

Where this idea and its true power starts is with what I’ve coined “Referential Compression”; when you refer to something by a label or name, and you’re able to compress an often tremendous amount of information into a small amount of information.

By me saying “USA”, those 3 characters leverage the information you already have in your head, so that I don’t have to explain things like its geography, people, culture, etc. This allows me to reference information in a very compressed manner, which I would posit is required for any sufficiently advanced conversation.

When you utilize this concept, it means you can start with basic concepts and then simply leverage them later as you build on them. This may seem simple and a part of basic learning, but many people ignore this in their training and scaling of systems.

This is why I focus highly on labels and names for concepts (like “contrast“). So that I can simply refer to them by a label and the concept is brought to front and center. This means I can start to exponentially reduce the time it takes to teach a new concept, because the “libraries” of information are already present, and simply have to be ‘called’ by a high quality label to connect the dots for someone.

In a meta way, this article is doing it already. I can now say “let’s build some RC or Referential Compression” and I can reference information in this article. You can turn information into an inside joke, that takes very little effort to reference in the future.

I highly recommend to think about concepts or heuristics that you think are really helpful, apply a name, and then build referential compression so you can share, reference, and build on it more easily with others in the future.