Unscaled: How AI and a New Generation of Upstarts Are Creating the Economy of the Future
by Hemant Taneja
This is the essence of unscaling: Companies can rent scale. They no longer need to own it. And that changes everything. In the twenty-first century, technology and economics are driving the opposite—an unscaling of business and society. This is far more profound than just startups disrupting established firms. The dynamic is in the process of unraveling all the previous century’s scale into hyperfocused markets.
This is the essence of unscaling: Companies can rent scale. They no longer need to own it. And that changes everything.
In the twenty-first century, technology and economics are driving the opposite—an unscaling of business and society. This is far more profound than just startups disrupting established firms. The dynamic is in the process of unraveling all the previous century’s scale into hyperfocused markets.
Scale no longer gives companies an automatic advantage when unscaled and focused companies can tap into platforms and build products and services for a specific audience.
Unscaling will involve transitioning away from ownership and toward accessing services. So, for instance, transportation will become an on-demand utility. Owning a vehicle is an expensive part of most people’s budget. If you live in an urban environment, chances are, you won’t need to own a car.
In a regulated industry companies are too often motivated to serve the regulators, not the customers, and the economics of a regulated company give the company little incentive to innovate. That can make regulated sectors like energy a ripe target for entrepreneurs with fresh ideas.
"This is the essence of unscaling: Companies can rent scale. They no longer need to own it. And that changes everything."
"In the twenty-first century, technology and economics are driving the opposite—an unscaling of business and society. This is far more profound than just startups disrupting established firms. The dynamic is in the process of unraveling all the previous century’s scale into hyperfocused markets."
"Scale no longer gives companies an automatic advantage when unscaled and focused companies can tap into platforms and build products and services for a specific audience."
"In an economy driven by AI and digital technology, small, focused, and nimble companies can leverage technology platforms to effectively compete against big, mass-market entities. The small can do this because they can rent scale that companies used to need to build. The small can rent computing in the cloud, rent access to consumers on social media, rent production from contract manufacturers all over the world—and they can use artificial intelligence to automate many tasks that used to require expensive investments in equipment and people."
"Vertical integration means owning much of the “stack” that gets a product from an idea to a customer’s door. A corporation might own a lab to invent products, a factory that made parts for products, another factory that assembled the parts into a whole, a distribution system, and maybe the retail stores. It meant building huge scale, which took time and a lot of money. Once erected, these big-scale barriers to entry made it hard for newcomers to compete because it was supremely difficult to build all that scale."
"Unscaling will involve transitioning away from ownership and toward accessing services. So, for instance, transportation will become an on-demand utility. Owning a vehicle is an expensive part of most people’s budget. If you live in an urban environment, chances are, you won’t need to own a car."
"In a regulated industry companies are too often motivated to serve the regulators, not the customers, and the economics of a regulated company give the company little incentive to innovate. That can make regulated sectors like energy a ripe target for entrepreneurs with fresh ideas."
- →Scale no longer gives companies an automatic advantage when unscaled and focused companies can tap into platforms and build products and services for a specific audience.
- →By 2017, ten years after the iPhone, platforms could do almost everything a business might need. One person could start a global company in her basement and compete against giants just by renting everything that major corporations used to need to build for themselves.
- →The experience most of us really want is to easily find exactly the product we’re looking for, no matter where we are at the moment, and have it delivered into our hands within a couple of hours. That’s an unscaled consumer experience.
- →To get good jobs, people won’t need to set aside a four-year chunk of their lives and a ton of money; instead, they might choose to learn a little at a time over a lifetime—perhaps even get many micro-degrees.
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