Why are you less productive with more effort — The Law of Diminishing Returns

Abhilash Marichi
2 min readDec 28, 2020

If you are putting in more effort but you are barely productive or getting lower returns, then you must know this — The law of diminishing returns.

Photo by Sora Shimazaki from Pexels

The law of diminishing returns states that — In productive processes, increasing a factor of production by one, while holding all others constant, will at some point return lower output per incremental input unit.

To understand this let me give you an example —

Let’s say you run a restaurant, if you do not have any cooks then your restaurant will not run. If you add one cook then suddenly your restaurant is productive and you can serve food but there might be many customers waiting for their food at the table, so you add a second cook, now everybody gets food on time and you can serve more customers and in turn, your profit goes up. If you add a third cook, your profit might still go up marginally but not so much because the third cook might not have enough work to do, and if you don't realize this and, if you add a fourth cook, you might start losing money because you will have to pay salary for the fourth cook and there might not be any work for him to do.

This is what happens to us when we simply put more and more effort without carefully looking at all the factors involved.

If you are building any product and if you are simply adding feature after feature, it might not make your product successful.

One or two cups of coffee in the morning could make you more productive and alert but if you drink four or five cups you might be a hyperactive paranoid person running all around and you would become counter-productive.

There are many things in life like this, for which when the effort is increased the result won’t increase.

So whenever, you are working hard and getting too little in return, you must ask yourself that if I am putting in the optimal effort and you should adjust it or another way around it is to change the other variables, if we take the example of adding cooks to the restaurant, you can make the whole thing more productive again by changing the other factors like increasing the size of the restaurant, increasing the menu, etc.

So in this new year, I would urge you to do that and get out of the diminishing returns curve and make profits.

Happy New Year!

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Abhilash Marichi

Data Engineer at Amazon. I write about Data, Product & Life.