Scale > Growth
Bigger is not always better. It’s often just bigger, and more complicated.
For decades, the conventional wisdom was that bigger was always better. The larger you got, the argument went, the more likely you were to achieve market dominance and create economies of scale that led to lower average costs and production efficiencies that would offer you a measurable advantage over your competitors.
But this perspective conflates scale with growth.
Growth means adding revenue, often at the same rate, you’re adding cost.
Scale means margin expansion, adding revenue at a greater rate than costs.
The stall point for many companies is when they find themselves a $100 million organization trapped in the body of a $30 million company.
Why do they stall? They confuse growth for scaling.
Scaling Beats Growth
Every company struggles with growth and the decisions that come with that. Inherent in that decision is how to grow. Not many leaders spend enough time on this.
Bigger is not inherently better; it’s just bigger…and more complicated.
Consider the Services business models — gain a client, hire more people to service the client, and add…
