Seth’s Blog: Carrying capacity

An organization with eight people in it might be happy, profitable and growing. The same business with twenty might be on the way to bankruptcy.

Ideas, markets, niches and causes have a natural scale. If you get it right, you can thrive for a long time. Overdo it and you stress the inputs.

The earth has a carrying capacity, certainly. It might change as a result of technology (we know how to grow food more efficiently than we did a century ago) but in any moment of time, there’s a limit beyond which degradation kicks in. I don’t think many would say that we currently have a people shortage. (Impossible to pull off, but worth considering: what if we skipped a growth cycle in the population and everyone in a generation had just two kids? Or even one…)

Your industry might have room for six or seven well-paid consultants, but when you try to scale up to 30 or 40 people on your team, you discover that it stresses the market’s ability to pay.

Interesting note: there’s also the common problem of under-staffing. More lawyers in a market might create more lawsuits. More effective ad vehicles certainly create more advertising. More lanes on the highway have been demonstrated to lead to more people commuting to work. Sometimes, adding capacity is exactly the right strategy if your goal is to add more revenue.

The next time you find your business struggling, take a minute to think about scale. More people (or fewer) might be the simplest way to solve your problem.

I found this to be a super interesting post. Seemed to speak to the level of success we’ve had at CSI over the years. I think one of the main reasons why things have gone so much better over the past year is that our scale is in better alignment.

Image credit: Seth Godin at Flanders DC on flickr by aPieter Baert