I’ve been trying to figure this out for sometime: On the one hand, things in our world are getting bigger: Walmart… media conglomerates… Dell… merged airlines… megachurches… Home Depot… merged banks… Microsoft…
But on the other hand, things are getting smaller: The empowered individual can create a media company, using blog software; create a manufacturing company, using somebody else’s factory and somebody else’s distribution; create a multinational enterprise, using nothing more than a Skype line.
I wondered whether small was just a trend or a new organizing principle for the business world. I now think it could be the latter. Small won’t replace big, of course, but small will add up to considerable new competition. And that is because small can now succeed. The economies of scale must compete with the economies of small.
On the supply side, the point of critical mass has imploded. It used to be, you couldn’t make money writing unless you got paid by a big publisher; now you can begin to make enough money blogging. It used to be, you couldn’t make money running a store unless you had location and marketing and capital and employees and enough revenue to support all that; now you can make enough money on eBay. It used to be, to get a job you had to be willing to dress up and commute; now you can work at home online. The cost of running business has declined; the revenue you need to be successful thus declines.
But there’s the critical calculation: The price of independence declines. In a world where most people are sick of their jobs — be honest now — this is big. There is no loyalty from employer to employee and given the chance to earn FU money, there will be no loyalty from employee to employer. We’ll see more and more people trying to make it on their own and now more and more can.
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