When Not to Scale Your Business

Today’s online platforms may offer companies unprecedented opportunities to grow, but scaling simply for the sake of scaling could be a recipe for disaster.

“Just because you can do something doesn’t mean that you should,” writes Phil Simon, author of  The Age of the Platform: How Amazon, Apple, Facebook, and Google Have Redefined Business. “In fact, there are often very valid reasons to limit your platform and restrict certain types of content, products, and services.” In a guest post for Inc., Simon uses Amazon as an example of a company that has the capability to sell practically anything online, yet consciously chooses to exercise discretion. In the case of its eBook offerings, Amazon’s policy is that it will not post content that is freely available on the Web, since doing so would actually dilutes the power and stickiness of its platform.

Simon argues that with great online power comes great gate-keeping and curating responsibility. “The best leaders, companies, and platforms…understand that less is sometimes better than more,” he writes. “Don’t mistake can for should–especially when the entire ecosystem suffers because of sloppy curation.” Read Simon’s full post for more on why choosing not to scale can sometimes be the right business decision.

Related Content from OpenView:

Establishing your business is one thing. Scaling it is another. A good first step to making sure you’re prepared is to read this post on how to scale your business the right way. And as this post from the OpenView Blog advises, keep in mind that one of the most critical lessons a company can learn is that it can’t efficiently scale without establishing, committing to, and communicating its mission, vision, and values (MVV).

photo by: JD Hancock

Full StoryFrom Inc.

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  • http://www.menco-finco.com/ edward blake mendez

    thank you all for the useful link! regulating your business model and its delivery channel falls squarely into actively managing your service offering and product portfolio; moreover, narrowing your focus facilitates implementing effective profit margin management tactics.

    our independent legacy + pension practice used to focus on personal and business advisory relationships; however, our incremental profitability analysis provided evidence that moved our prospecting efforts exclusively to business advisory relationships. we custom-tailored our service offering to private business owners between age 45 to 65 seeking a profound pivot in life. 

    limiting the scale and honing our fee pricing power has truly paid off with more time allocated where we can make the most impact.   

    blake mendez