"Economies of scale"

Airbnb, which was founded in 2008 years, is now the darling of the world's brightest travellers: it encourages owners to rent extra rooms from their homes through the Internet, by buying payment services and mobile interfaces, establishing certification and rating systems, and actively use social media to create a closed-loop, traveller housing online rental community. Since its establishment, "Air board and lodging" has more than 500,000 listings, has provided services for 9 million renters, and is expected to surpass Intercontinental Hotels and Hilton Global Hotel group in 2014 years, and become the world's largest hotel group.

Another company that was born later, called Walby Parker Warby, was founded at the end of 2010, and the company sold the fashionable prescription glasses online at a price of 99 dollars, and, contrary to the big-name spectacle sellers, cut down the inventory and SKU, And make full use of a series of new marketing tools-whether it is to integrate UPS Express logistics, or the application of customer behavior analysis software, social media marketing, etc.-to establish a complete set of customer satisfaction with the business process. The dozens of-employee-scale company has created a miracle: Walby has become the world's largest maker of glasses and a rival to the Luxottica, which last year estimated more than $13 billion trillion in market capitalisation.

Nowadays, more and more "small" companies are not only interpreting the "big" in the contemporary business context with their impressive performance; when we look at the common features behind it-beyond the industry map and the profit model, do we find that the law of "bigger is better" seems to have been overwhelmed?

Hemant Taneja, General Catalyst of the US private equity firm, recently Wen in the Harvard Business Review, creatively proposed a new idea for "economies of scale" (Economics of Unscale) Aroused the wide attention of people of insight.

Clearly, "economies of scale" are derived from the familiar "economies of scale" (Economics of Scale). The concept of "economies of scale" and the "experience curve" of Boston Consulting (BCG) have been a big success in the decades since the 60 's. The essence of the understanding is: for many industries, the output of each increase, production costs that followed by about 15%, the phenomenon is also the image of BCG interpreted as "85% Experience Curve ". Based on this research, BCG provides countless customers with solutions to optimize production, and more efficient cost control, which earns hundreds of millions of consultancy fees.

In the context of economies of scale, the product development of large enterprises can be simply summed up in the output design reference gross profit margin and marginal income twist negative. A carmaker, for example, must sell more than 100,000 cars to one of its models, and from that point on, profits will be offset by revenue. It also means that another fledgling car company, even though it has the ability to design a better model, will have only a modest market performance in the face of "economies of scale".

And with the advent of "economies of scale", everything is different. Even with the start of a very small amount of spending, thanks to the internet economy, companies will not have to rely on scale to compete, breakthrough technology development, unprecedented user touch, modular service outsourcing, efficient business operation, etc. Has spawned a global breakdown of increasingly accurate and profitable segments of the market (note: Even in the niche market, the absolute value of its capacity can be considerable!). , this has also brought about profound changes in real terms to the traditional real economy, because no enterprise (simply because of "scale") can pillow and disregard the competitor's encroachment and digestion of its market share.

So, further, what are the winning ways in the era of "economies of scale"?

First, learn to forget the classic "golden rules" about business operations and try to think in terms of "economies of scale". In the "Economy of scale" era, not only the allocation of resources, other things such as product design, labor input, production costs and other areas of the elements are moving towards a lighter, more small level of transformation. This change has also brought many new businesses to the "cash cow" in the BCG matrix, and the possibility of hand-to-hand combat with major industry giants. In addition, a more "precise" delineation of the target population with (both and potential) consumer demand and the provision of customized products and services--in a sense what Peter Drucker called "Mass Customization" (Mass customization)--is also at the core. Enterprises can obtain stable profits by purchasing professional services and innovating their "combination" and "binding".

Second, the emergence of information asymmetry as a result of business services, will inevitably be subversive business. In the middle of the last century, the popularity of automobiles and highways had greatly stimulated population mobility, and the people who came to town had made a difficult search for overnight locations: they had no way of knowing which hotels or inns could provide a reliable environment and facilities, Although similar to Mobil's travel guide hit, its information is still far from satisfying the needs of consumers. In this context, the hotel chain occasion the lack of information about the consumer group--If you stay in a small town at Holiday Inn, you will be very sure about the configuration of the Holiday Inn in the next town. The brand's promotional language aptly renders this point: "The biggest surprise is no surprises."

If the identity and comfort of hotel chains effectively defuse the consumer's doubts about the unknown and the independent space, then--before the internet is popular--small brand hotels are understandably struggling to sell. The huge information gap is also a powerful illustration of the reasons why hotel chains are sparing no effort to implement large-scale, unified style accommodation-as we see today in the hospitality industry leaders-Hilton (Hilton), Marriott (Marriott) and Starwood (Starwood). But in today's Airbnb to subvert the industry map of the era, thousand-room thousand-face unified style so that chain hotels have been proud of the business philosophy eclipsed, and even reduced to an awkward disadvantage.

Airbnb, with more than 500,000 listings, has been life-sized with the world's largest hotel chain, and, of course, it still needs to be focused on transparency of room information-and critics say there are still a lot of problems on the Airbnb web site, and that the room photos and descriptions don't match the real situation. However, the irreversible trend is: information asymmetry if the first day is eliminated, then we are familiar with the hotel chain will have? The answer is obviously no--not that the hotel industry is completely gone, but the rules of the game must be quite different from what we see in the real world. And look at other industry areas, because the information gap to resolve the pain and flourish of many other industries, will also be faced with the pattern of subversion.

Third, the "economy of scale" has brought about unprecedented development opportunities for innovative enterprises. They can participate in all kinds of business competition with equal Dan, such a situation in the past is not expected. In the case of Shapeways, the Dutch-based innovative manufacturer uses 3D printing technology to customize a variety of creative products for customers, including artwork, jewellery, iphone shell, trinkets, toys, cups, and provide customers with a platform to sell their creative products online. Since its inception in 2007, Shapeways has produced more than 1 million 3D print products, producing more than 6 billion pieces, and the number of online stores created by customers on its platform has increased to more than 8,000. Coincidentally, if a whimsical designer can create a polka dot bird feeder-He can also use an online platform like Etsy to unearth niche markets that are highly aligned with their products.

The better news is that the "economies of scale" innovation winners are not confined to the virtual world of economics. A utility provider named Gridco Bae, relying on distributed network and Advanced power control system, has entered the public energy field with high threshold, high monopoly and intensive effect. The company has developed a new generation of grid energy management facilities that can integrate public facilities around the world and more effectively regulate and utilize renewable energy sources, thereby enhancing efficiency and reliability.

Four, the Peer-to-peer model may have the opportunity to reverse attack. The service of freelance writers has always had market demand, but many talented writers suffer from "hiding in purdah" without being discovered by more employers, and the contently trading platform that came into being is dedicated to providing professional freelance writers for those who need content services, and since the launch in 2011, By the end of 2013, Contently's "story-telling platform" had brought together more than 30,000 freelance writers from around the world, of whom about 5,000 were ex-journalists with professional media experience, and the average turnover reached 275 dollars per piece. In January this year, contently a 9 million dollar investment from a number of companies, including Sigma Prime, in the B-round financing.

Like contently, Peer-to-peer services can help each of us stay in a "global pool" for process standardization and the way jobs are distributed around them. It can also be extended to many fields, from proofreading services (Kibin), Mentoring Services (LEARNBOP), to Language Partners (verbling), driving (Ridejoy), Scientific Research (science Exchange), cooking coaching (Culture Kitchen And even mysterious visitors (Spotcheck). The Peer-to-peer service provider (a host of modular services), which serves as the "emcee role of modular Service", effectively gathers seemingly decentralized production (decentralized production) to create a profitable niche market.

In summary, mass production and identity style often means "security" in the absence of information, the indifference of personal privacy and the tense relationship of trust. But the development of the Internet detonated the information, Unicom Global, reduced the cost of communication, but also reshaped people's privacy and interpersonal trust, once invincible advantage of large-scale operation is fading-replaced by the "economies of scale" of the day.

"This article is written by China International Writer, published on March 5, 2014," IT manager World ", print chain interview www.zhstudio.net/upfiles/Unscale.pdf, Cao Jiajian also contribute to this article. 】