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The End of Scale
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The End of Scale

Hemant Taneja and Kevin Maney
MIT Sloan Management Review, 2018
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Hemant Taneja, managing director for a venture capital firm, and Kevin Maney, a Newsweek journalist, sound the death knell for economies of scale. To survive in the AI-powered marketplace, large firms must learn to “unscale,” they explain. This article – adapted from their book, Unscaled – provides a brief overview of three ways corporations can do so. Find out also how some big companies have unscaled well.

Summary

Since the arrival of mass production and mass markets in the early 20th century, large companies have gained a competitive advantage from economies of scale. Now that’s changing. AI is hastening new technologies that will make “economies of unscale” the drivers of business through the 21st century. AI can learn about consumers and customize offerings for them, so mass production and mass marketing no longer confer a competitive advantage. In fact, success now requires individualizing offerings to each customer, not designing for mass appeal. And whereas scaling your business once decreased its fixed costs and made...

About the Authors

Hemant Taneja, with Kevin Maney, wrote Unscaled: How AI and a New Generation of Upstarts Are Creating the Economy of the Future.

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