But there are several different ways to achieve scale, and here they are:
#1.) Scaling with Code:
If your product consists only of computer code, this is the easiest form of scaling because you can run that computer code trillions of times for almost zero money:
In the gif above we’re running that code 10 times, but it can be also run 10,000,000,000 times for slightly more money, zero human intervention, and flawlessly executed every single time.
Example of Scaling with Code: Google
The primary product at Google is a giant ass piece of code.
When you search on Google, a large set of code runs on their servers and spits back an answer. This can happen thousands of times per second without any direct human intervention.
Some people click on ads, which are also served up by code, and they collect money on each click, which is also run by code.
Theoretically if everyone at Google went on break for a full week, the company could still generate hundreds of millions of dollars per day just by letting the machines run code.
Other Scaling with Code Examples:
- Sumo.com: It sells tools that go on your website to help collect more emails. All of this is 100% run by code, with humans occasionally changing up some of the code. If 10,000 new people signed up for Sumo.com in the next 2 hours, it wouldn’t crash the system since it’s just CODE running more times!
- AirTable: It’s a piece of software much like Google Spreadsheets but better. It’s all code, so if 10,000 more customers signup to AirTable today, the company wouldn’t implode.
- Zillow App: I have the Zillow app on my phone to look at home prices wherever I go. If I tell 100,000 people to download the Zillow app today, the system can handle it because it’s all just replicatable code.
✅ Scaling with Code Pros ✅
- Code takes no breaks.
- Code can perform certain tasks over-and-over cheaply and perfectly.
- Make a change to the code once, and it applies to every user instantly.
❌ Scaling with Code Cons ❌
- There’s only roughly 10,000,000 developers in the whole world.
- Few people can manipulate code very well, yet it’s a high in demand skill, therefore coders are often expensive.
- While code is scaleable, errors in the code are scaleable also! A small error in code can affect every user of your service.
- Code can get messy and complicated.
- Code requires constant updating with new technologies and trends.
- Got on app that runs on Android? Now you have to make it run on iOS. You also have to make it work for the web.
#2.) Scaling with Media:
The next easiest form of scalability is media. It’s closely tied to “code” because almost all media is now delivered digitally through code.
You can create a piece of media, then show it over-and-over again at virtually zero cost. This makes media a fantastic form of scaleable content.
“Media” itself is a term that keeps growing:
In the 1400’s Text and Pictures were this new form of technology.
In the 1900’s Audio was this new form of technology that could be broadcast.
In the 1950’s Video from TV started to get hot on the scene.
etc etc etc….
So “media” is always evolving into new formats, each with their own merits.
Media currently comes in multiple formats:
- Text (books, eBooks, webpages, PDF’s).
- Audio (records, CD’s, MP3’s, streaming, podcasts).
- Images (Instagram, Adobe Stock, Facebook).
- Video (DVD’s, YouTube, streaming, TV, Cable, NetFlix).
- Virtual/Augmented Reality (Oculus Rift, HTC Vive, Snapchat Filters, Facebook Video Filters).
- Other future sensory experiences that continue to emerge.
Example of Scaling with Media: NetFlix
NetFlix is primarily a collection of media assets.
It started out delivering media on DVD’s, then it transitioned to delivering media through streaming over the internet.
The beauty of NetFlix’s model is they can spend $5,000,000 making a show, but once it’s finished they can show it MILLIONS of times a year for 20+ years, with only the tiniest amount of cost per showing!
Let’s say in 5 years Stranger Things picks up a cult following and people start re-watching it a bunch, there is no extra work to do, and no extra cost to NetFlix except some small bandwidth costs.
That is the power of media.
✅ Scaling with Media Pros ✅
- Write/Record once, can replicate it endlessly for nearly zero money.
- The technology for replicating your media is already built for you by others.
- Media can be applied and monetized in nearly every industry.
- Media can be used to amplify your thoughts to millions.
- There are more ways than ever to produce and distribute media.
- The barrier to entry for making media is relatively low.
❌ Scaling with Media Cons ❌
- The barrier for entry is low, and therefore more competition.
- Media is relatively easy to copy or duplicate without permission.
- Media has to be refreshed or updated when old.
- There’s been a media explosion in the last 10 years, so it takes more to stand out.
- Certain types of media is getting devalued as more and more is free.
Other Scaling with Media Examples:
- Tim Ferris: He has an audio podcast, a written blog, a video channel, and books for sale. Despite having several different mediums, his main product is media that he can show or sell over-and-over for little effort. Theoretically Tim could disappear for a year and his existing media assets would continue to make him money.
- KopywritingKourse: This site is just a collection of Text, Images, and Videos. By producing unique pieces of content over the years, it continues to grow as an asset.
- The Hustle: This massive daily newsletter is just Text and Images. Thanks to the increase in marketing automation (in this case being able to deliver hundreds of thousands of emails for almost no money), The Hustle can reach a huge audience by creating only a small amount of media everyday.
#3.) Scaling with a Product:
Once you’ve designed a process to build a product, you can crank out a bunch of them quickly.
With a physical product you will often need processes and people in place to manufacture and ship the actual product, which makes it a little more difficult than code or media.
Example of Scaling with a Product: Tesla
Tesla’s job is to create a car, a process which can take months to years. However once that car and processes are working, they can then crank out a car every few minutes.
Other Scaling with a Product Examples:
- Dry cleaners: Your local dry cleaner has equipment and people to perform a service (dry clean your clothes). They are optimized to perform one task, and do it thousands of times per day as a service.
- Philips Hue Bulbs: Philips makes a handful of different products for their internet connected smart lightbulbs, and then they just sell those over and over again.
- Xiaomi Mi Scooter: This is one of those electric scooters you might see in a ride sharing program (such as Bird or Ride) in many major cities. This company produces this one electric scooter, and then cranks out thousands of them to meet demand.
✅ Scaling a Product Pros ✅
- There’s often a high barrier to entry for competitors including patents, copyrights, and trademarks.
- A good product can launch a whole line of additional accessories and a solid brand.
- Research and development can really pay off if a product gets popular.
❌ Scaling a Product Cons ❌
- Low demand for a product means possibly not recouping initial production costs.
- Lots of things can go wrong in the real world production process.
- Often lots of variables such as bad suppliers, bad shipping, fluctuating raw cost prices etc.
- Copy cat products get to sell a similar product without all the initial research & design costs.
- Having a hit product and high demand for a physical product can possibly tank a company because of the amount of money needed to make the goods (and if demand doesn’t stay strong, this can be disastrous).
#4.) Scaling with People:
Almost any process on the planet can be scaled, but some of them currently require real humans, not just computer code.
Scaling with people is often the hardest form of scale, because:
People require breaks.
People can be expensive.
People require leadership.
People are sometimes unreliable.
People sometimes don’t get along.
People screw up from time to time.
People get tired of repetitive actions.
With code & media, each successive “repeat” of a process costs very little, whereas with people each “repeat” of a process is often more expensive.
Example of Scaling with People: Ogilvy Advertising
If a new customer like Dell or Microsoft comes to Ogilvy and wants a whole new advertising campaign, there has to be a massive amount of people involved in this such as:
- Creative directors
- Art directors
- Media buyers
- Project Managers
- UX Designers
- Video editors
- ….the list goes on!
A task like this requires large teams of people to work on a project.
But the entire Ogilvy advertising firm doesn’t just work on ONE project at a time, they work on hundreds! This means they must scale their process up, and their main product is people!
Other Scaling with People Examples:
- DesignPickle: They allow people to get graphic design done on the cheap, and their secret sauce is hiring a bunch of graphic designers and creating a system where a project request comes in one end, and a finished product goes out the other end.
- WPCurve: They allow people to make small changes to WordPress websites, so their whole company is based around creating a process for coders and designers to follow so they can get through every request per day.
- McDonald’s Hamburger University: Since McDonald’s employs more than 350,000+ people, with a high churn rate, they need to make sure they can replace a person who quits very quickly. Their Hamburger University is a finely tuned process to train people quickly and efficiently.
✅ Scaling with People Pros ✅
- People are far more versatile at performing tasks than current day machines.
- People can adapt quickly and figure out new things on their own.
- People can interact with other people more astutely.
- People can switch jobs, interact with others, and contribute to multiple projects.
❌ Scaling with People Cons ❌
- People have a whole host of requirements and issues which prevent them from working 24/7.
- Someone must provide strong leadership.
- Lots of processes are required.
Quotes about scaling:
Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media).
Code and media are permissionless leverage. They’re the leverage behind the newly rich. You can create software and media that works for you while you sleep.
An army of robots is freely available – it’s just packed in data centers for heat and space efficiency. Use it.
If you can’t code, write books and blogs, record videos and podcasts.
Methods to scale summary:
1.) Scaling with Code
Examples: Google, Sumo, AirTable.
Good For: People who can code.
2.) Scaling with Media
Examples: NetFlix, Tim Ferriss, Kopywriting Kourse
Good For: People who can create content themselves, or get others to make it.
3.) Scaling with Product
Examples: Tesla, Dry Cleaners, Xiaomi Mi Scooter
Good For: People trying to solve a specific need, engineers, designers.
4.) Scaling with People
Examples: Ogilvy Advertising
Good For: People who are good leaders, people good at making processes.