Combining the S-Curve with the Knowledge Funnel
As a quick recap, the S-Curve (Sigmoid Curve) describes how a product, technology or company grows over time.
In the early stages things are uncertain and adoption is slow. The hunt for product-market-fit increases impact, and when it is found sales accelerate. Once the product/technology/company starts to saturate the technology adoption lifecycle, things slow again.
If we look at this through the lens of the knowledge funnel - at the beginning the company deals with a mystery - an area they think they can add value too once understood. They start to develop heuristics to try to understand it and create products/services around this. Once they have found the mechanics of how to profitably create value (and market it) they have validated their heuristics and can start to add efficiency and extract profit. As long as their algorithms for how to create and sell the product hold sales will continue.
Eventually however things slow - once you have squeezed an algorithm to its extreme you cannot extract anymore value from it. At the same time, competitors can easily copy algorithms, and therefore can easily copy any efficiencies you have made. This creates saturation in that you now have consumed a % of the Total Addressable Market (TAM), your competitors have moved in and taken more of the TAM, and you are running out of ways to extract much more.
Competitors will only increase at the algorithmic stage, there is no point in copying a heuristic that may or may not be true, so your chance to maximally extract value is short lived.
The S-Curve tells you that things mature over time and start to deliver less - but do no offer an opinion on how to fix this. The Knowledge Funnel states that you need to go in search of new mysteries, that when solved, unlock value.