Economies of Scale – For Your Life

Does It Scale Princess Bridge

I think one of the more trendy questions I’ve seen online about business is, “But does it scale?” I’m pretty sure most people only ask that question to sound like they know what they’re talking about so let’s talk about what that actually means.

Economies of scale essentially means “more output, lowered cost.”

  • You wish to buy 100 bananas for $100 or 500 bananas for $350.
  • In this case, the banana supplier is passing on part of the cost advantage of providing more bananas to you.
  • Once a supplier meets initial costs, there are only marginal extra costs for acquiring each additional banana.
bricktamland_060412
Brick doesn’t like it when he can’t have his bananas.

However, complexities, bureaucracies, or operating inefficiencies can strongly impact the scalability of a business, also known as “diseconomies of scale.” So if the banana supplier had a bad crop, he may have 25% less bananas and have to increase his cost to $1.25 each, thus disrupting the purchasing behavior of customers.

Now, let’s make a personal transition. Several of my friends and I have a theory that, although we have a lot of commodities at our disposal to play with, the only commodity we actually have is time. More time spent investing into something should lower the amount of time it takes to do it. In that, let’s figure out if your life scales when you hate your job.

  • You have 16-18 hours a day awake
  • 70% of Americans feel negative about their jobs
  • You wish to spend 8 of those hours doing a job you don’t like, but it covers basic costs
  • You spend 2 hours of each day thinking about how much you don’t like your job, your boss, or proper lack of training
  • You complain to your friends or family approximately 30 minutes each week about it
2E47B59D00000578-3311121-image-a-30_1447111830480
This is what happens when you complain too much to people.

This means you will waste 548 hours each year. You’re also going to offset your likeability with your colleagues, friends and family, which will decrease your social capital. All the wordy terms aside, happiness starts with how you spend your time, which is a direct result of the kind of return you are getting from it. More output should lower the amount of time it takes to do something, so make sure that something is worth doing to you.

You may want to ask yourself, “Does my life scale?” No matter what the answer is, act accordingly.

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