Do Things That Don’t Scale?
Introduction
In the world of entrepreneurship, it’s common to hear the phrase "build something that scales." But what does it really mean to "scale"? Is it the holy grail of business achievements, or is it a myth perpetuated by venture capitalists and advisors who don’t have a clear understanding of the complexity of human experience?
In this article, we’ll delve into the concept of "doing things that don’t scale" and what it really means for entrepreneurs, small business owners, and anyone looking to build a successful and sustainable business.
What Does "Do Things That Don’t Scale" Mean?
In 2011, Paul Graham, a famous entrepreneur and investor, wrote an essay titled "Do Things That Don’t Scale." In the essay, Graham describes the early days of his company, Y Combinator, and the concept of "Tilted Markets." By this, he means that not every business can be hugely successful, and some may only be able to thrive in a specific niche or market.
Graham argues that many entrepreneurs are under the impression that they need to build a business that can be replicated and scaled quickly to reach massive success. However, he believes that this is not always possible. Instead, Graham suggests that entrepreneurs should focus on building something that is unique and allows for deep customer engagement.
Examples of Things That Don’t Scale
Here are a few examples of business ideas that do not scale:
- Personalized, customized solutions: Services like personalized nutrition planning, private yoga instruction, or one-on-one coaching can be highly successful, but they are necessarily limited to a small number of clients.
- Local, tangible products: Goods like handmade jewelry, artisanal food, or locally made clothing are often crafted in small quantities and may not be able to be mass-produced.
- High-touch, high-touch services: Services like accounting, law, or medical care often require a high degree of personalized attention and may not be particularly scalable.
When to Build Things That Don’t Scale
So, when should you consider building something that doesn’t scale? Here are a few scenarios:
- Serving a niche market: If you’re targeting a specific underserved or overlooked market, you may need to build a business that can’t be scaled to reach a broader audience.
- Offering personalized services: If you’re offering a high-touch, high-touch service like a therapist, doctor, or coach, your focus is on individualized attention and you may not be able to scale.
- Creating unique, tangible products: If you’re a maker, artist, or craftsman creating one-of-a-kind products, you cannot replicate your work at scale.
Challenges of Building Things That Don’t Scale
Building a business that doesn’t scale comes with its own set of challenges:
- Scalability: As the business grows, you may struggle to maintain the level of personalized attention and service that was initially possible.
- Cash flow management: With fewer clients or customers, it can be more challenging to manage cash flow and ensure financial sustainability.
- Marketing and sales: You may need to adapt your marketing and sales strategies to focus on attracting a smaller, targeted audience.
| Challenge | Example |
|---|---|
| Scalability | A personal trainer working with a small number of clients |
| Cash flow management | A craftsman creating handmade jewelry in small batches |
| Marketing and sales | A small, independent book publisher targeting a niche audience |
Conclusion
Building a business that doesn’t scale requires a different mindset, set of skills, and approach. It’s not for everyone, but for those who are willing to put in the effort, the rewards can be substantial. By understanding your business’s limitations and focusing on what’s truly important to your customers, you can build a successful and sustainable enterprise.
In the words of Paul Graham, "Building a successful business is not about having a good idea, but about executing it well, and that means doing things that don’t scale."
In conclusion, building a business that doesn’t scale can be a rewarding and fulfilling experience. By understanding the challenges and opportunities, you can create a business that brings you joy, serves your customers, and generates a decent income.