Scaling Up

One enduring challenge in chemical synthesis is scaling up. You may have discovered how to make a particular compound that is important commercially, but the protocol used in the lab may not pan out on a larger industrial scale. Scaling up is also a challenge in non-chemical business ventures, and this is the subject of John List’s The Voltage Effect. The book’s title comes from electrical circuits where the driving force to move electrons in a circuit – the potential energy difference measured by the voltage – can be higher or lower than expected.

 

The first half of the book covers the five problems that can prevent what seems like a good business idea from scaling up, i.e., they cause a voltage drop. These are: (1) false positives usually due to a non-representative data set when testing, (2) not knowing your audience or how to broaden it, (3) whether your innovative source is dependent on certain individual people, or processes, or products, (4) unforeseen spillover effects, and (5) sheer cost of scaling up. Like any business book, there are memorable anecdotes. The author provides a good mix of academic research and notable vignettes from his time in industry.

 

I wouldn’t say anything jumped out at me that I hadn’t read before, but it made me think about whether teaching and learning can be scaled up. The author (having worked at both Lyft and Uber as chief economist) makes the point that digital things can be scaled up easily; we have the technology to quickly and easily copy 0’s and 1’s! But Baumol’s cost disease applies to human beings with expertise if scaling up for mass production. So, it depends on whether you need the person-to-person direct transmission. I suppose some things can be learned through a digital device, but other things are not so easy. There may also be an issue of quality degradation – how important it is will depend on many factors. If you need expert human teachers, scaling up will be a huge problem because the supply is limited. I’d like to think my expertise both in chemistry and in teaching is irreplaceable, but perhaps that’s not true depending on one’s end-goal.

 

The second half of the book provides four “secrets” to increasing the voltage of your undertaking. These are (1) having the appropriate incentives that can scale, (2) keeping the margins in mind – an economic way of approaching certain problems, (3) knowing when to quit, and (4) the scaling of that nebulous, undefinable thing known as workplace “culture”. The incentives discussion is mostly common sense, while marginal thinking isn’t. The latter is well-worth learning, in my opinion, although I can’t say I’m great at it yet – I learned the hard way why it’s important. The most interesting chapter was the one on knowing when to quit. It made me think about significant points in my own life where I faced challenging forks in the road – do I pursue something or do I let it go as a sunk cost?

 

One annoying part about the book is that it feels like the author’s vignettes shout out how clever he and his colleagues are in figuring out things that would scale and things that wouldn’t. I don’t know if that was his intent, but if felt like being exposed to resume padding and self-promotion. He does have interesting vignettes because of his varied experience, and I was reminded that those experiences can be very useful in thinking outside the box. Having spent most of my working life in academia my thinking is likely overly insular and I should at least consider branching out if the right opportunity comes along. I’m good at saying “no” when I should be better at saying “yes” because I like to protect my own time. But maybe I’m just afraid of change and challenging myself. That reminder is one positive aspect of reading The Voltage Effect.