{"id":4252,"date":"2019-11-28T08:47:28","date_gmt":"2019-11-28T12:47:28","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=4252"},"modified":"2022-03-11T15:38:02","modified_gmt":"2022-03-11T19:38:02","slug":"what-is-scalability","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/what-is-scalability\/","title":{"rendered":"What Is Scalability? (And Why Should You Care?)"},"content":{"rendered":"\n<p>What is scalability? How does scalability affect our lives? When is scalability a good thing? When is it a negative thing?<\/p>\n\n\n\n<p>Scalability is the characteristic or ability of a company or process to grow and adapt to changing demands. In the scalable parts of our lives, physical limits don\u2019t apply and effects tend toward incredible extremes.<\/p>\n\n\n\n<p>We&#8217;ll further explore the scalability definition above, cover how scalability affects our lives, and cover which areas of our lives are most impacted by scalability.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What Is Scalability?<\/strong><\/h2>\n\n\n\n<p>One reason that <a href=\"https:\/\/www.shortform.com\/blog\/black-swan-theory\/\">Black Swans<\/a> are so profoundly disruptive is that they occur in the \u201cscalable\u201d parts of our lives\u2014where physical limits don\u2019t apply and effects tend toward incredible extremes. When a particular thing\u2014an income, an audience for a particular product\u2014is \u201cscalable,\u201d it can grow without any additional expenditure of effort.<\/p>\n\n\n\n<p>To answer the question, <em>What is scalability?<\/em> let&#8217;s look at careers as an example.<br><\/p>\n\n\n\n<p>\u201cMassage therapist,\u201d for example, is a \u201cnonscalable\u201d profession. There is an upper limit on how many clients you can see\u2014there\u2019s only so much time in a day, and therapists\u2019 bodies fatigue\u2014and thus there\u2019s only so much income you can expect from that profession.<br><\/p>\n\n\n\n<p>\u201cQuantitative trader,\u201d however, is a \u201cscalable\u201d<em> <\/em>profession. It takes no additional energy or time to purchase 5,000 shares of a stock than 50, and your income isn\u2019t limited by physical constraints.<br><\/p>\n\n\n\n<p>Artists, too, are in a scalable profession (at least in the age of digital reproduction). For instance, a singer doesn\u2019t need to perform her hit song each time someone wants to hear it. She performs it once for the record, and that performance can be disseminated widely.<br><\/p>\n\n\n\n<p><em>What is scalability?<\/em> It&#8217;s the ability of something to grow with increased resources. The problem with scalability is that it creates vast inequalities. Let\u2019s look at the singer example again:<br><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><em>Before the advent of recording technology<\/em>, a singer\u2019s audience was limited to those for whom she could physically perform. That is, a singer in one town wasn\u2019t likely to prevent the survival of a singer in another town; they might have differently sized audiences\u2014based on the populations of their respective towns\u2014and thus different incomes, <strong>but those differences would be comparatively mild<\/strong>.<br><br><\/li><li><em>After the advent of recording technology<\/em>, however, a small number of singers come to dominate the listening public. Now that we can pay pennies to stream Beyonc\u00e9 any time we want, why spend the $10 or $20 to see a local singer we\u2019ve never heard of? Suddenly, differences in audience and income become vast. <strong>With scalability comes extremes<\/strong>.&nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Scalability, Mediocristan, and Extremistan<\/strong><\/h2>\n\n\n\n<p><em>What is scalability?<\/em> And what does scalability have to do with <a href=\"https:\/\/www.shortform.com\/blog\/mediocristan\/\">Mediocristan<\/a> and <a href=\"https:\/\/www.shortform.com\/blog\/extremistan\/\">Extremistan<\/a>? \u201cMediocristan\u201d is Taleb\u2019s term for the facets of our experience that are <a href=\"https:\/\/www.shortform.com\/blog\/non-scalable\/\">nonscalable<\/a>.&nbsp; For example, like the income of a massage therapist, human physical traits such as height and weight hail from Mediocristan\u2014they have upper and lower bounds, and if you were to graph every human\u2019s height and weight, you would produce a <a href=\"https:\/\/www.shortform.com\/blog\/the-bell-curve\/\">bell curve<\/a>.&nbsp;<br><\/p>\n\n\n\n<p>Mediocristan\u2019s overriding law can be stated thus: <strong>Given a large-enough sample size, no individual event will have a significant effect on the total. <\/strong>That is, there will be outliers\u2014extremely heavy or tall people\u2014but those outliers (1) will not be <em>exponentially<\/em> larger or smaller than the average, and (2) will be rendered insignificant by the sheer number of average cases. Most physical phenomena\u2014human footspeed, trees\u2019 rate of growth\u2014come from Mediocristan. (Shortform note: <a href=\"https:\/\/www.shortform.com\/blog\/nassim-nicholas-taleb\/\">Taleb<\/a> sometimes treats Mediocristan as a distinct place, other times as an adjective to describe certain kinds of phenomena.)&nbsp;<br><\/p>\n\n\n\n<p>\u201cExtremistan,\u201d oppositely, describes those facets of our experience that <em>are eminently <\/em>scalable. <strong>In Extremistan, inequalities are vast enough that one instance can profoundly affect the total<\/strong>.&nbsp;<em>What is scalability?<\/em> It&#8217;s a phenomenon that characterizes Extremistan.<br><\/p>\n\n\n\n<p>Most social (man-made) phenomena come from Extremistan. For example, wealth: It has no readily detectable upper limit; and if you were to include, say, Jeff Bezos, in any average of human wealth, you would produce a grossly distorted picture of how much money most people have.<br><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Extremistan\u2014Where Black Swans Fly<\/strong><\/h3>\n\n\n\n<p>In the realm of Mediocristan, randomness is highly constrained (mild): There\u2019s only so much variation in the physical aspects of our world. <strong>Thus, in Mediocristan, <\/strong><strong><em>Black Swans are (effectively) impossible<\/em><\/strong>.<br><\/p>\n\n\n\n<p>In Extremistan, however, randomness is highly variable (wild): No matter how large your sample size for a given phenomenon, you can\u2019t produce a trustworthy average or aggregate picture because of the <em>variation <\/em>in that phenomenon. <strong>In Extremistan, <\/strong><strong><em>Black Swans are frequent<\/em><\/strong>.<br><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Key Qualities of Mediocristan<\/strong><\/td><td><strong>Key Qualities of Extremistan<\/strong><\/td><\/tr><tr><td>Nonscalable<\/td><td>Scalable<\/td><\/tr><tr><td>Typical member is mediocre (\u201caverage,\u201d in the <br>statistical sense)<\/td><td>Most members are <br>dwarfs, a few are <br>giants<\/td><\/tr><tr><td>Best-off are only marginally better than <br>worst-off<\/td><td>Best-off are <br>considerably better off <br>than worst-off<\/td><\/tr><tr><td>Events are predictable from available <br>information<\/td><td>Events are highly <br>unpredictable from <br>available information<\/td><\/tr><tr><td>Probability distribution is a bell curve<\/td><td>Probability <br>distribution accords <br>either with <br>Mandelbrotian \u201cGray\u201d <br>Swans or is dominated <br>by Black Swans<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><em>What is scalability?<\/em> Consider an Extremistan phenomenon like wealth. In Europe, the probability that someone has a net worth higher than 1 million euros is 1 in 62.5; higher than 2 million euros, 1 in 250; higher than 4 million, 1 in 1,000; higher than 8 million, 1 in 4,000; and higher than 16 million, 1 in 16,000. <strong>The odds decrease at a constant, rather than accelerating, rate<\/strong>, <strong>indicating that their distribution doesn\u2019t conform to a bell curve.<\/strong><br><\/p>\n\n\n\n<p>(Note: The European wealth statistics cited above aren\u2019t precise, but they illustrate the central point: that wealth is scalable and does not look like a bell curve.)<br><\/p>\n\n\n\n<p>The upshot is that<strong> in Extremistan, as the name suggests, extreme events have much better odds of occurring than in Mediocristan. Simply put, <em>the bell curve does not apply<\/em>.<\/strong> Another way of answering, <em>What is scalability?<\/em>: It&#8217;s when the bell curve doesn&#8217;t apply.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is scalability? How does scalability affect our lives? When is scalability a good thing? When is it a negative thing? Scalability is the characteristic or ability of a company or process to grow and adapt to changing demands. In the scalable parts of our lives, physical limits don\u2019t apply and effects tend toward incredible extremes. We&#8217;ll further explore the scalability definition above, cover how scalability affects our lives, and cover which areas of our lives are most impacted by scalability.<\/p>\n","protected":false},"author":4,"featured_media":4292,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,25],"tags":[60],"class_list":["post-4252","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-statistics","tag-black-swan","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What Is Scalability? 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