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Tuesday, April 12, 2005

Jeff: Scale Doesn't Scale Anymore!!

Jeff writes in an insightful piece titledScale Doesn't Scale Anymore saying aggregation is the new scale. Excerpts with edits and comments:

The old days of big players in the economy collecting consumers, audience, distribution, manufacturing efficiency, buying power, or capital in the grip of centralized control are waning. That used to be the way to find efficiency and size. That used to be the way to scale. But they are being foiled by our new distributed world. And they are being replaced by a more efficient means of finding size and efficiency. Aggregation is the new scale. The decentralised, distributed future would change the nature of industry landscape in future. Some examples:
News: As a producer, why depend on the 300 (expensive, snarky, recalcitrant) reporters you pay for when you could have 3,000 aggregated reporters to get more news less expensively than ever before- As a consumer, why depend on one or two sources of news a day when you can aggregate the best of 200?
Media: As a distributor, when you can no longer use your stranglehold on channels to guarantee you an audience, you will have to aggregate audiences to reach scale.- As a creator, you're going to have to establish your own direct relationship with your audience: You have to do your own aggregating.
Every industry may have to adjust to the decentralized future. Money will be destroyed (on one side, but saved on the other) and the upheaval will make the business restructuring of the '80s look like a garden party. But pity more the industries that are bound to atoms - airlines, home-building, shipping, and health care, say - that will have a hard time finding the efficiencies of aggregation, the new scale.

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