Pepino de Mar studio/Stocksy
It’s conventional wisdom in business that bigger is better, and that being able to scale is an essential element of a company’s success. But there is a flaw at the heart of the concept of scaling, though it can be hard to articulate. Many of our ideas about scaling rest on foundational economic ideas eloquently espoused by Adam Smith in The Wealth of Nations. The canonical text opens with a description of a pin factory in France to demonstrate the benefits of scaling. Looking at this story from a modern vantage shows important points that Smith — and the generations raised on his ideas — may have missed: that modern work thrives on boundary-crossing and integrative thinking, which create benefits far beyond those ascribed to simple conceptualizations of division of labor and specialization; that there are tradeoffs involved when we mechanize people through specialization; and that there may be other, better metrics to measure success. In light of this, it’s worth also considering other kind of scale: scaling a model, scaling impact, and scaling humanity, rather than growing individual companies.
For some time, scale and scaling — meaning that a business grows to ever-greater size — have been the holy grail of the startup and corporate world. Implicitly many believe that if something doesn’t scale, then it’s a failure. Bigger means better, and not-bigger means failure. For example, we know one entrepreneur who created a popular social network, but because it did not scale to become one of the major social networks, for some time he saw his business as a failure even though it throws off millions in revenue and brings together communities who all enjoy the same game. Likewise, we have written about the experimentation process that led to Rent the Runway, but because this business has inherent limits to scale tied to renting physical assets, some have pushed back on the example because “it didn’t really scale.”
