Why Scale?

Something I’m thinking a lot about entrepreneurship:

Why scale?

Or in other words:

Why is scaling up seen as desirable?

And also– are there hidden downsides of having a really big scale?

When it is better to be a mouse than an elephant

Example from Nassim Taleb‘s “Antifragile” book:

A mouse is less likely to break its bones than an elephant.

This has to do with scale. A bigger elephant is more fragile to falling than a smaller organism.

And contrary to modern thinking– it seems that (in the long run), smaller companies tend to out-live really really big companies.

Furthermore, merging two companies almost never seems like a beneficial thing. When companies scale larger, things get more complex, and often the resulting chimera company is inferior.

Why I would prefer a Mazda Miata over a Ford Mustang

The Ford Mustang is a very cool car, but I would always choose a Mazda Miata over it.

Why? Smaller cars are generally more fun to drive! It is more fun to drive a go-kart than to drive a tank. You feel more responsiveness in a smaller car than a bigger car. A smaller car also handles better, turns better, and you can feel the acceleration better as well!

I think this has to do with scale. A smaller-scale car seems superior:

Cheaper to produce
Fewer materials
More fun to drive
Easier to park (no more need to loop around the block several times to find a big enough parking spot).

In theory it seems that ‘bigger is better’, but in real-life living, it seems that “smaller is better”.

When is bigger better?

If you’re in a street fight, and there was a 300-pound beast fighting a 120 pound person, I would vote on the 300-pound beast.

But then again, it gets tricky. A trained 120 pound person might be able to beat a 300 pound (goof).

Size is a quick heuristic (rule of thumb) to signal strength. But often smaller guys are stronger!

Who are the strongest guys at the gym?

This is something I find very fascinating:

The strongest guys at the gym (500+ pound deadlifters) are muscular, but they don’t look that “muscular” or “strong”.

In fact, most powerlifters are quite modest in size. And it seems that they can lift a lot more weight than body-builders (who have more impressive looking muscles).

In praise of smaller cameras

USC, 2019 #ricohgriii

I am currently shooting with a RICOH GR III, which is actually even SMALLER than a Ricoh GR II (already super small!). And it is great, because this is what I have discovered about photography:

The smaller your camera, the more likely you are to carry it with you everywhere you go, the less friction necessary to shoot photos.

Thus with smaller cameras, you shoot more! And the more you shoot, generally the happier and more creative we are!

Why I prefer AirPods over Massive over-ear headphones

Bigger headphones have more impressive bass and sound quality than smaller headphones (Apple AirPods). But I will always prefer the AirPods.

Why?

In everyday living, you can have the AirPods with you everywhere you go! There is far less friction to use them than to use a huge pair of headphones. Also the problem of storing the big headphones (it takes up half your backpack).

Bigger companies = more stress

If your life goal is to maximize the amount of stress and concern in your life, hire more employees.

This is the tricky thing with scale:

As you scale a company up, complexity increases at an exponential rate.

For example as any parent can attest:

Going from 1 child to 2 children isn’t twice as hard, it is probably 200x as hard.

I know for myself, I hate having to ‘manage’ anyone else. Why? I can barely manage myself, let alone manage another human being. Furthermore, we only have a limited amount of energy in a given day. I don’t want to waste any energy having to micro-manage people.

My ideal co-workers: independent and self-driven individuals with great passion. You don’t need to manage these type of people; they direct and manage themselves!

Why do we desire more numbers?

It seem as humans, our mental calculations are still too basic from an intuitive level.

For example imagine if we were still cavemen. Obviously 100 apples is superior to just 1 apple.

But in modern-day life, is 100 million really superior to 1 million dollars? Having 100 million might be 10000000x more stressful than owning just 1 million dollars. And the person who owns “only” 1 million dollars might actually have more personal freedom, happiness, and joy in their lives than the richer (but more enslaved) person.

Social proof

Of course there is this notion of ‘social proof’:

The more people who attracted to you, the more legitimate and powerful you seem.

But this isn’t accurate. If you have Bill Gates follow you and admire you, he outweighs 10 million “normal” people. But we humans aren’t good at judging this, we just get suckered by numbers.

Who do you desire to impress?

To me, I would rather impress 3 individuals who I venerate than 3 million “random” people.

It also does seem that from an entrepreneurial perspective, better to have 10 rich people in your business network than 100,000 “middle-class” people follow you.

Conclusion: Smaller is better

Strive to be small as possible. If you need to scale up and expand, that is fine. But to scale for the sake of scaling ain’t the goal.

The goal is to become more powerful, gain more influence, and to exert yourself more. And perhaps, better to have a few great individuals putting forth great effort than millions of “normal” people?

ERIC