So what is “scaling”? In its most elemental form, it simply refers to how systems respond when their sizes change. What happens to cities or companies if their sizes are doubled? What happens to buildings, airplanes, economies, or animals if they are halved? Do cities that are twice as large have approximately twice as many roads and produce double the number of patents? Should the profits of a company twice the size of another company double? Does an animal that is half the mass of another animal require half as much food?Geoffrey West – Scaling: The surprising mathematics of life and civilization
You can’t escape Amazon in the digital economy. Now a trillion-dollar company, they have disrupted diverse sectors from retail to software development with a deftness and drive that’s admirable and alarming. They actually seem to be speeding up their rate of innovation as they scale, defying the Law of Large Companies that causes giants to get dragged down by their own girth.Scott Brinker – Want to innovate like Amazon? This is their formula
How do they manage that?
Some great insight into how Amazon is able to innovate at scale, especially in AWS. Provides some insight into answers to the questions I asked a couple of years ago in Companies and Superlinear Scaling. (Which I now need to revisit and expand)
Superlinear scaling in cities, which appears in sociological quantities such as economic productivity and creative output relative to urban population size, has been observed, but not been given a satisfactory theoretical explanation. Here we provide a network model for the superlinear relationship between population size and innovation found in cities, with a reasonable range for the exponentArbesman, Kleinberg, and Strogatz – Superlinear scaling for innovation in cities
From 2009, work related to what Geoffrey West discusses in his book Scale.
I am about 100 pages into Geoffrey West’s book, Scale, and am having a hard time not just skipping ahead to the parts about cities and companies.
Cities, West says, scale superlinearly (aka increasing returns to scale) whereas companies scale sublinearly (aka economy of scale). Which is why cities typically last a long time, and companies (and animals, for that matter) typically die young.
What if you could structure your company to scale superlinearly? Is it possible? If so, how would you go about making that happen? Would you even want it to happen, or is it a good thing that companies “die” young?
Back to the book….