Tim Stenovec: Hello, I’m Tim Stenovec. Welcome back everybody. As Tunisia notes in the reading companies massively scaled up throughout the 20th century. It was a time to take advantage of economies of scale.
Now, we’re in a time when the opposite is true. The larger size can be a hindrance. Were experiencing an unscaling of business and of society. It’s a time where startups continue to disrupt larger companies and industries as a whole.
Artificial intelligence allows small entrepreneurs to compete with larger established businesses. As a result of unscaling, we’ll continue to see disruption in most industries, including transportation, education, health care, and energy. This trend will create more opportunities for you.
The entrepreneurs. Technological advances including robotics, A.I., genomics, and 3D printing are furthering those possibilities. Small companies are able to now rent scale to compete. Entrepreneurs are able to more successfully reach a micro markets and cater to individual customers than their larger counterparts. Rentable tech platforms help in this regard. As Tunisia states it used to be that scale gave a company a competitive advantage, including a cost advantage. This was a large barrier to entry for smaller competitors.
Things have changed though, smaller companies are now able to better serve small targeted niches by tailoring their products to them, which is ultimately more appealing to the consumers who want what they want when they want it. This is how Uber and Airbnb were able to disrupt the competition. The unscaling that is happening now is taking apart whole aspects of the economy and flipping them.
This unscaling started as early as 2007, following the introduction and popularization of Facebook, the iPhone, Amazon, and more. Vertically integrated companies began to crumble. Platforms have enabled this to happen, and smartphones and mobile networks, they’ve allowed new products and services to reach everyone.
As we and our culture have become increasingly digital, we’ve begun to collect additional information digitally, which has propelled advances in artificial intelligence. We’ve gathered information on consumers, on products, on purchasing behavior, and on more. A.I. will continue to further the unscaling we’re experiencing. A.I. will enable entrepreneurs to further cater to niche markets and individuals better by pinpointing and meeting their individual needs. Bigger companies will find it difficult to compete against these smaller, nimbler startups and entrepreneurs who have data on their side.
Amazon Web Services, cloud-based products, software and platform became a launching pad for entrepreneurs back in 2006 and 2007. As Tunisia states, the new platforms made it possible for a new generation of entrepreneurs to re-imagine how we do things and to build disruptive new apps. This is disruptive products and industries like cameras, like maps, publishing, flashlights, music, and more. Technology now is the ability to conform to humans. The Cloud is where data, resources, computing, and connectivity have all come together. Tunisia claims that the quote: “Unscaling of the economy is proportional to the connection into the Cloud.”
Occupations of the future will also radically shift to become more entrepreneurial. People will be selling their own unique services on-demand to many different employers. Digitally. Traditional employment will decrease for the majority of people who will do better working for themselves. Our education system will be impacted as well, including high schools and colleges. People may begin to question the way they’re being educated. And health care will completely shift with an emphasis on preventative versus reactive intervention.
Answer the following question(s) in a 1 page (minimum) paper:
1. Discuss how large size can be a hindrance for a business.
2. Describe how a company can have a competitive advantage without scale.
