Bigger, better, larger, faster - is it time to rethink scale for the planet’s sake?

Article highlights:

• Bigger, better, larger, faster: the need to acquire and expand has been baked into every part of life – why settle for less when you can have more? This is the myth that underpins our unsustainable lives.

• Scaling vs sustainability - Scaling requires us to extend beyond ourselves yet  sustainable lives and businesses are those that are in sync with community, with the cyclical nature of the earth, with the creative constraints of our natural human existence. Can we have both? 

• Deprogramming from the concept of scale - Can we stop ourselves from craving unnatural growth and scale in everything and lead smaller, more humble lives? Can we Copyleft instead of Copyright?

Introduction

I remember the first time I really grasped the implications of the economic system that our globe depends on was when watching the Story of Stuff. This must be about 10 or 11 years ago, and at the time I was firmly embedded in the corporate world, running a venture capital fund and entirely immersed in the myth of scale and continuous economic growth and how good that was for everyone. The lifting of millions of people out of poverty, improvements in standards of living, stable economies and stable nations and all of the other  benefits of the advance of the industrial and then the technological age were (and still are) persuasive. 

Bigger, better, larger, faster seemed to be not only inherently good but also required. The need to acquire and expand had been baked into every part of life – the word ambition had been conflated with the world view that is the driver of unsustainable lives and nations: why settle for less when you can have more? This is the myth that underpins our unsustainable lives - even food started to be super-sized as if in response to our super-sized hunger for more.

Start up model: Repeatable, scaleable and profitable

My fund invested in startups and that no longer meant just a new business. The term ‘startup’ acquired a new definition in the first tech boom that has stuck:  a startup is a company that has a product and a business model that is repeatable, scaleable and profitable.

Repeatable. This means that you have a product that can be launched in most places globally that does not have to be built from zero at each deployment. This is the difference between Air BnB and you opening a hotel in your house. Air BnB can deploy anywhere in the world because they do not have to build, or even own the assets that they make money off. If you run a hotel from your house, no matter how successful it is, in order to deploy globally, you will have to rebuild your house from Sao Paolo to Sweden Sydney.

Scalable. This means that your fixed costs will decrease over time, so that as you grow, your costs decrease. Back to your hotel in your house. If you do replicate your house in Sao Paolo for example, you will need to buy, rent or build a lookalike house, you will need to employ the same number of staff and buy the same amount of stock as you have at home. Your costs will therefore grow in proportion with your rate of deployment.  You are a service company and less likely to be scaleable. Google is probably the very best example of a totally scaleable business model. Google is a product, not a service. We think of it as a service because it appears to provide us with the service of answering the questions that we do not know or cannot remember the answers to. In fact it is a software product that is very specifically an automated ad agency, the search function is a method for ad delivery. At the beginning it lost money because its fixed costs (servers) were high and its revenue was zero. Over the years, with numbers of users (ad targets) growing exponentially and asking more and more questions, its fixed costs decreased relative to growth of customers and users. It is the very best example of scalability.

Profitable. In the weird world of start-ups, profit is not actually the most important element and many of the most successful were not profitable for years but still had eye watering valuations. The key thing is to have a clear roadmap towards profitability AND have unquestionable scalability and repeatability. 

Now, the reason that I point to this definition of start-up is that it drives investment. An investor will not look at a new business that does not have these elements present. Startups want to scale so they can get investment so that they can keep scaling. That’s the most critical stage – how do we expand? How do we robotize so we can speed everything up and get bigger faster, make money quicker and keep on doing that.

Sustainability vs Scalability 

This is a way of thinking and being that is at odds with sustainability.

Sustainable lives and businesses are those that are in sync with community, with the cyclical nature of the earth, with the creative constraints of our natural human existence – we need sleep, connection, beauty, love. Scaling requires us to extend beyond ourselves and it is so embedded as a reasonable ambition that we don’t always connect scaling and growth to the larger issues that we face globally. The conundrum for many start-ups wanting to contribute products and services to the world to enhance sustainability, to live well and gently within ourselves rather than extended beyond ourselves, is that they can’t attract investment that would allow them to scale in a natural sustainable way within the limits of community and their own capacities because investors prefer the scale that doesn’t recognise limits and goes beyond community impacting millions of lives, not just a few.

This conundrum can prevent many potentially sustainable and impactful businesses from starting and if they do start, it can prevent them from continuing because somehow we have been conditioned to conflate small with failure and big with success. Going back to the house as a hotel example I used earlier:  in our scale obsessed world we would consider Air BnB as far more successful and attractive than a small eco-hotel that contributes to the earth it is built on, the community it is embedded in and to the lives and wellbeing of the people who run it. We even overlook the unintended consequences of Air BnB’s scale on housing costs and communities when we look at their valuations.

Alternative ways to grow a business

There are other ways to grow a business.

There are many movements that run counter to this obsession with scale and many entrepreneurs and startups that are looking for alternative ways to grow – Zebras Unite and Common spring to mind as great examples of thought leadership and action in this area.

So there is a change afoot. I suspect that this nascent change in approach will be accelerated by the fall out of pandemic, in itself a product of our super scaled global economy. Many of us have recognised for the first time that our scaled economy is fragile and that relying on all of us to continue to buy more and more stuff truly isn’t sustainable.

Deprograming this concept of ‘scale’ 

Can we deprogram this way of thinking?

Can we stop ourselves from craving unnatural growth and scale in everything and lead smaller, more humble lives that see less as success and more as potentially problematic in our complex and challenged world? Can we be brave and look inward to our communities, our local economies, our deeper ties to each other, to the issues that our neighbours have rather than the issues that the world has and be satisfied with that impact? 

Can there be a new definition of scale? That a model that is repeatable and profitable (or if it’s a non-profit, sustainable) can be scaled by it being recreated by lots of different micro-enterprises with their own localised team, market, neighbours and piece of the earth? I believe that this new idea of scaling, that relies on radical generosity, a sense of humility and our interconnection with each other and our planet is a way through the conundrum. Can we have the courage to share our ideas rather than to insist on copyright and intellectual property? I heard the ideas of open source and creative commons neatly summed up in the expression ‘copyleft’ which means: please take our ideas, use them and help us scale a sustainable way of being where lots of people benefit in a small way rather than a few people benefitting in a big way.  Instead of saying  I have a great product/service that is locally impactful and sustainable and I am going to scale that so that I can benefit from more, could we say instead:  I have a great product/service that is locally impactful and sustainable please copy and replicate and share and build where you are? Instead of thinking about a 5 year business plan, can we shift to thinking about a 500 year plan and make the contributions that truly spring from our hearts and our desire to steward our beautiful home planet for the generations that follow and trust that the ripples will create impact in ways that a 5 year business plan tied to scale couldn’t possibly imagine? Can we dare to plant trees that we know we will never shelter under but our great grandchildren will?

Conclusion

We have experienced our first one world synchronous event in the form of the pandemic, we are possibly in the eye of the storm, with second waves to come around the world.

This experience has shown us many things, one of them is how quickly global supply chains, global thinking and global leadership falters under any sort of pressure. The climate that we have created and the economy that we keep going with sticking plasters and blind hope will bring a great deal of pressure over the next few years. Now more than ever is the time for building lives and businesses that are within our natural limits, that connect us to the earth and to each other and to reimagine a world where we scale because it is good, useful and benefits many, not just because we can.

About the author

Jane is a former lawyer who has spent her career specializing in venture capital. She ran a fund for a couple of decades and oversaw investments in start-up/early stage companies in a broad cross sector of industries. 

With first-hand experience of the world of cut-throat competition, individualism and isolationism, and having seen the impacts of those paradigms amplified by technology, she founded Peacebeam in 2016.

Peacebeam is a digital publisher working at the intersection of technology, wisdom and interconnection. Jane is passionate about reimagining the role of the entrepreneur and the company and creating a new economic story by experimenting with value and capital. She is pioneering Kindness Capital at Peacebeam and has recently authored The Path of the Entrepreneur, Understanding Your Shadow, for the London School of Economics accelerator LSE Generate.

Jane sees that in order to traverse the challenging times we live in there needs to be an evolution from the pursuit of individual wellbeing to the pursuit of collective worldbeing and believes that understanding the ‘technology’ of kindness and its creative power is the pathway to a saner future for the planet.