Here's how to read it:
First, the circle represents your Easter or Christmas Eve attendance. Most places that is the best attended service all year. Even if you're not a big outreach church, you'll still have 130% of your average weekend. If outreach is big for you, you'll have much higher. The other thing the circle represents is all (or at least more) of the adults that might be in your auditorium over the course of an average month. If you're like most of us, your people aren't there every Sunday. They come 1 or 2 times a month.
Second, the square represents all the people who are connected at your church. That is, the ones who are already in a small group, a Sunday school class, serving in a ministry, etc.
In the example, there are 2000 adults in the Easter services and there are 500 adults who are connected. We don't know how many adults are there on average, but lets say there are 1400.
Now, think about what happens when you invite someone from inside the square (connected) to host a small group. If you ask them to invite their friends...who would they invite? People from inside the square, right? Isn't that who their friends probably are? Other people from inside the square?
What if you invite the people who are barely connected to host a small group? Who are they likely to invite? Other people in the circle? I think it actually would be people outside the circle! Think about that! What if everyone you asked to host a group invited 8 of their friends to join the study? And what if those 8 came from outside the circle? Oh, you'd have all kinds of problems. But they'd be really good problems!