Master the Art of Business
A world-class business education in a single volume. Learn the universal principles behind every successful business, then use these ideas to make more money, get more done, and have more fun in your life and work.
Scale is the ability to reliably duplicate or multiply a process as volume increases.
Scalability is limited by the amount of human involvement required in the process. The smaller the level of required human attention in the process, the more the business can produce.
People don't scale. On the contrary, the larger and more pressing the demand, and the more demands that need to be addressed, the lower the effectiveness.
The smaller the level of human involvement, the more scalable the business.
Think of a skilled quilter who specializes in creating quilts by hand. Assuming each quilt takes a week to produce, having one active customer a week is great: creating and delivering a single quilt to a single customer is no problem at all.
Having two customers at once is challenging: Customer #2 has to wait until Customer #1 is served.
If the quilt maker receives a thousand orders in a single day, that's a huge issue-there's no way to keep up with the demand without keeping customers waiting, which creates an undesirable level of Scarcity.
Scale is the ability to reliably duplicate or multiply a process as volume increases. Scalability determines your maximum potential volume. The easier it is to duplicate or multiply the value provided, the more scalable the business.
Contrast the handmade quilt business with a scalable business like Starbucks. Assume the average Starbucks has the capacity to serve a hundred beverages an hour-any demand above that, and the store starts getting overcrowded.
The solution? Build another Starbucks-even if it's right across the street, not an uncommon sight in cities like New York.
Scalability is typically limited by the amount of required human involvement in a process. Starbucks is able to enhance their ability to duplicate lattes via Automation. Starbucks employees are involved in making drinks, but the process is semi-automated: a machine actually makes the espresso, many of the ingredients are pre-prepared, and so on.
The overall level of human attention or intervention that's required to make a good drink is actually quite small, which is why Starbucks can crank out so many drinks every hour.
If your goal is to create a business that doesn't require your direct daily involvement, scalability should be a major consideration. Products are typically the easiest to Duplicate, while shared resources (like gyms, etc.) are easiest to Multiply.
Humans don't scale. Individual people only have so much time and energy each day, which is a constraint that doesn't increase with the volume of work to be done. On the contrary-effectiveness usually goes down as demands increase, an idea called Performance Load. As a result, services are typically difficult to scale, since they tend to rely heavily on the direct involvement of people to deliver value.
As a general rule, the less human involvement required to create and deliver value, the more scalable the business.
"Ut sementem feceris, ita metes." (You reap what you sow.)Marcus Tullius Cicero, ancient Roman statesman and orator
Master the Art of Business