April 12, 2005
Scale & Aggregation
Posted by Gordon Smith

In the 1990s, I learned a new word: scale. This is not that evil machine that measures my weight. It is not that small, slippery plate found on the outside of a fish. I am referring to scale as a verb, not as a noun. As in, "Does your product scale?" This usage is related to the expression "economies of scale," where average costs decrease as production rises. In the 1990s sense, therefore, scale conveyed the idea that a product or business model could be replicated and grown to blockbuster proportions.

This just in: "scale doesn't scale anymore."

According to Jeff Jarvis, the new focus is aggregation. Jeff gives loads of examples, but here is one that is easily accessible to all of us:

Retail: Why settle for the same crap that's in every mall everywhere in the world (even on once-hip lower Broadway) when you can aggregate the unique stuff of an eBay? And, for that matter, why bother with all those bricks when you can aggregate a more efficient customer base online? (See: Amazon.)

Jeff speaks of aggregation, but his post reminds me of another 90s idea: mass customization.  That is easy to see in his blurb about education: "How much better to be able to aggregate teaching, to select my teachers instead of having to throw my lot with one bunch or another."

But this is mass customization on steroids. Aggregation is about picking pieces and putting them together in uniquely valuable ways. Each piece of the whole may have some value, but putting it with other pieces creates additional value. It is interesting to me that the best internet companies are aggregators: eBay, Google, Amazon, Yahoo. The technology enables aggregation, and we are willing to reward those who aggregate in clever and useful ways. I am not ready to give up on scale, but it's clear that aggregation is a powerful idea.

UPDATE: What is the flip side of aggregation? Disaggregation, of course. Eric Goldman has it covered

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