Monday, April 6, 2015

Our Ability to Scale...

"Friendships don’t scale... they are built on mutual trust... one at a time"                         

                           ~Brian Russell

Imagine for a moment that you’ve just invented a new communication device.
This new technology allows you to use the earth’s upper atmosphere to reflect communication waves allowing  you to talk from anywhere to anywhere.

No longer would you need to be within the boundaries of a cell tower... just push a button and you have the ability to talk to another phone "just like it" anywhere on earth.

How much would an invention like this be worth?

Now some people might say that this new technology is worth billions.

I, on the other hand, would say that this invention is totally worthless (for the moment at least).

Why the differing opinions?

The key is the phrase "another phone just like it"... if no one has a phone just like it... than the technology is absolutely worthless because you can’t actually connect with anyone.

What makes a new technology like the one described above  work, is a network of people who actually use the technology.

No matter how good Facebook, LinkedIn, Twitter, and/or Pinterest’s underlying platforms are... they are totally useless without the millions of people in the network who also use these services.

The same thing goes for service providers that play in the middle between product and/or service providers and consumers.

Diner’s Club and Carte Blanc credit cards found out this truth many years ago when they failed to reach critical mass...

Those credit card companies failed to enlist enough merchants who actually accepted these cards as payment.

Without the merchants’ participation, consumers couldn’t use their cards and they soon became useless to the consumer who opted to use another brand of credit card (Visa or MasterCard).

Discover is probably on the same track as those two former credit cards... although it may eventually build a strong enough network to give it escape velocity.

Escape velocity is a physics term defining the speed at which a projectile needs to travel in order to break free from the gravitational forces of a larger object... such as a space ship leaving the earth’s gravitational pull.

The internet has allowed new companies to quickly scale up to escape velocity once the concept can be proven. 

Scalability is defined as a platform that, when fully built, can accommodate additional members on the network at little or no additional cost but will grow exponentially in value based on the total number of members contained in the network.    

Companies such as Uber, AirBnB, Dropbox, Snapchat, Spotify and Square didn’t even exist 10 years ago but now they have 100’s of millions of networked users with 10’s of billions in valuation.

Each company provides a valuable service to their user base, but their real value comes from their scalable networks connecting producers with consumers.

So you might now be thinking that the key to creating a great deal of value (and wealth for their founders) is to define and build a new business model that simply fills a common need and then build a scalable platform around that idea... and you would be correct... if it was just that easy.

That would be akin to saying that the only thing necessary to winning the Power Ball Lottery is to simply choose the right numbers... easy to do in theory... but nearly impossible to do in practice.

It is safe to say then that most of the success in the world doesn’t come from scalability but rather it comes from making incremental gains over a long period of time.

In most aspects of people’s lives, more is not better...

It is not better to have more than one significant other at any given time.

Having hundreds of homes or cars does not make your life better... and in fact there is a strong argument that it probably makes your life worse trying to keep track of everything.

And unless you’re "octomom", birthing 8 children at once is not a good thing...

Buying more food Burger!!!that you can possibly eat and watching it spoil is simply just wasteful but go to any Costco or Sam’s Club on a Saturday morning and you’ll see hundreds of people doing just that.

I know more companies that have gone bankrupt, not from having too few customers and sales, but rather from growing faster than their cash-flow allowed.

Often I like to snipe about a national restaurant chain (I’d rather not mention the chain by name)... that prides itself in serving its customers a huge quantity (of really bad) food...

What I have discovered is that people are starting to understand that more is not better... better is better.

Better to find your one true love and stay true to that person than to keep looking to upgrade every few years...

Better to find a career that you love and have the opportunity to grow over time than to continuously go from job to job every few years to make a bit more money doing something you hate.

Better to take your time to hire good people who fit your company’s culture, rather than recruit, hire, train, coach, fire, and repeat over and over...

Better to make quality investments that pay a reasonable rate of return rather than try to gamble on "get-rich-quick" schemes or high-risk ventures.

Better to invest in additional educational experiences... than to spend on luxury vacations.

Better to invest in growing your appreciating assets... rather than spending on growing your closet full of designer clothes and garages full of more unnecessary things.

Better to spend quality time in the present living in the moment... rather than dwelling in the past or pining for the future.

We have but only one life to live... we have only one body to maintain... we have a finite amount of days on this earth to make a difference...

We can continually long to have more and more... or we decide that we already have enough stuff and we should instead be making more of what we already have...

This is not to say that we should stop trying to achieve our goals or creating wealth for ourselves and our family.

We can always lust after more... but for things that make a true difference in our lives...

More knowledge... more experiences... more learning... more charity... more creativity... more kindness... more freedoms... more friendships... more love... more gratitude for what we already have... more opportunities to give back...

Life is full of abundance which gives us the opportunity to scale... the ability to connect... and the prospects of doing something meaningful in our lifetimes.

Thank you for your support of OptiFuse where we hope to continuously grow... but not so fast as to forget how to provide outstanding service to our loyal customers like you...

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