Scale of operation capability has been a deciding factor in war for many centuries, and in businesses since the beginning of the Industrial Revolution. People oversimplify scale. Scale is only a benefit if you are larger than your competitors. Relative scale is what matters.
(It’s the same if you’re competing with who you were yesterday. I’ll talk more about this another time.)
Relative scale succeeds when the means of competition are roughly the same (e.g, both sides of are warring with similar weapons, or two businesses have similar business models). We see David v. Goliath upsets when the competitors are using different tactics entirely, or playing by different rules. Then the relative scale can become a limitation, a hindrance.
My observation is that what makes everything worse in a changed situation – whether war or business model competition – is the reluctance to recognize the shift combined with stubbornness (the ugly twin of persistence). Britain and France got bogged down in a trench war with Germany in WW1. Rather than changing approach, everyone just executed artillery strikes harder. Sears and other big retailers had the potential to compete against digital suppliers like Amazon, but doubled down on their physical retail space advantage rather than recognizing it was a growing liability. Kodak famously invented a digital camera but dismissed it as inferior, failing to recognize the power of pixel density doubling and quadrupling each year.
It’s easy to criticize others in these stories. It’s harder to see it when you’re making the same category error. Therefore, strive for humility when you have a relative scale advantage, and be willing to release your stubborn grip to better hold any advantage loosely. It helps to remember you win bigger by playing the long game rather than optimizing for short-term gains.
