What 'The Voltage Effect' has to say about scaling

5 signs that tell you whether your idea is scalable 💡

Why do so many things that work at a small scale, flop when they’re scaled up? In his masterpiece The Voltage Effect, John List identifies 5 traits of a scalable idea.

These are relevant for innovators, data scientists, researchers, and anyone looking to grow a business.

1️⃣ It has to work. Between small studies and confirmation bias, it’s easier than you think to get this wrong.

2️⃣ Your study should be representative. We often choose the most promising or convenient groups of people to study, expand to the general population, then get disappointed that the results don’t carry over.

3️⃣ You shouldn’t be using unscalable “ingredients”. Deep discounts and world-class talent don’t scale.

4️⃣ There shouldn’t be weird spillover effects. This one can be hard to predict. Seat belts proved a lot less impactful once people start driving faster because seat belts provided safety.

5️⃣ There should be economies of scale. Per unit costs should go down (and definitely not up!) as you scale. While 100 customers may be happy to pay $$$$ for your product, you might struggle to find 10,000 customers that will.

John’s solution is essentially to do things that no one wants to:

• More studies and independent replication

• Broader studies, including populations less likely to show an effect

• Avoid using ingredients that are unscalable

• Measure and study side effects

• Figure out future costs, and try to build in economies of scale

I think research that reveals nuggets of truth is worth it for its own sake.

But if we’re trying to take an idea to the real world, we should probably consider these to know whether it’s likely to work outside the confines of a small pilot. It might be more costly and disappointing upfront, but that’s better than failing at the end.