Scale?

I hear this word a lot, whether I talk to a cutthroat capitalist, a climate activist, or a philanthropist. In the name of impact & urgency, we strive to scale at any cost to create a lasting impact. I fear it sounds similar in the name of becoming a billionaire quickly; we want to scale a business at any cost. I fear “scale”; to me, scaling up at any cost is like a virus, and we know viruses are not beneficial and could wipe out humanity. I worry that we in mainstream culture are obsessed with scale, but we forget that in the name of scale, products lose their soul, create centralized hierarchical workplaces, toxic work cultures, and pressure. It’s less of a proven scientific law and more of a critical observation supported by evidence from economics, sociology, and business studies.

The Dilbert Principle & Bureaucracy, as organizations scale, they inevitably require more formal rules, hierarchies, and middle management to function. This is a well-documented sociological and economic phenomenon. Data from employee surveys (like Gallup’s State of the Global Workplace) consistently show that employee engagement declines as company size increases. Larger organizations report higher levels of disengagement and a feeling of being just a “cog in a machine.”

In addressing social and climate change, the effort and resources required to assist each additional issue often increase, while the quality of the impact may decrease. It is entirely an opinion based on years of experience.

The economist E.F. Schumacher made this argument famously in his 1973 book Small Is Beautiful: A Study of Economics as if People Mattered. He argued that giant organizations and technologies lead to alienation and environmental damage, while smaller-scale approaches are more sustainable and humane. This philosophy underpins the modern localism movement and B-Corp certification, which prioritizes social and environmental goals alongside profit.

If you wish to read this book, I found an Internet Archive link while researching it.

That is why I somewhat firmly believe that scale and impact cannot go hand in hand. That is why I want to look at scale differently, with decentralized models (such as open-source software, holding companies, acquisition-driven compounders, and platform co-ops), which aim to achieve scale without the traditional, centralized, hierarchical drawbacks.

The unquestioned pursuit of financial or impact returns at all costs is contrary to the idea of stakeholder capitalism, especially when it involves scaling rapidly or quickly, or blitzscaling, as this can lead to unintended consequences. We need to have checks and balances when it comes to the concept of scale. We also need to think differently, to scale without losing our soul, and scale without centralization, and not scale too fast. Without considering the long-term impact of centuries, this mindset feeds into our short-term impact ego, which can be detrimental to the harmony of nature and disrupt the social fabric. It is crucial to understand and critique the “impact ego” and “moral superiority” that often accompany the idea and obsession with achieving impact at scale.

Think? If you can’t think, why not pick up the book Small Is Beautiful?

Here are some excerpts from the book:

“What is the meaning of democracy, freedom, human dignity, standard of living, self-realisation, fulfilment? Is it a matter of goods, or of people?

Of course, it is a matter of people. But people can be themselves only in small comprehensible groups. Therefore, we must learn to think in terms of an articulated structure that can cope with a multiplicity of small-scale units.”

“The essence of civilisation is not the multiplication of wants but the purification of human character.”

“The fundamental task is to achieve smallness within large organisation”

We need to find ways to rethink scale, rethink about impact compounding, something I am extremely passionate about, we talk about compounding returns over a long period of time as a patient investor but we rarely talk about impact compounding, how to do the capital allocation that compounds impact for a long period of time - extended to eternity, like Buffet did with his compounding machine, Berkshire Hathaway, I am yet to see someone building an impact compounding machine, but it can’t solely rely on centralised scale systems, but rather scale through smaller units (SMEs, Mittelstands, Shinise).

If you are building something in the Nordics, Canada, Singapore, or Japan, I’d love to learn more from you. Please reach out to me at nobody@firstfollowers.co.

Peace out!

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Who am I?
Nobody.
And that is everything.