Since I started in this Internet I attended all possible events related to entrepreneurship, business, investment, and networking related with Internet in general, and was intrigued to learn the concept of scalable business. Also coming from a multinational consultancy, at least it was clear it was NOT a scalable business.
Basically, a scalable business is one that has a lot of potential to grow, but not adding as many resources and investment to the business as we want to achieve growth, as in the traditional business model or consulting, where for example: In a cafe, for sell twice coffees, if there is demand, we must increase twice the number of waiters, increasing costs double, so the benefits will be higher penalties, not getting a big difference or return on investment (ROI).
In contrast, scalable business, typical network economies, is possible by the process efficiency, shorten routes, making it more efficient to reduce investment and therefore achieving business growth potential, where higher profits are not always synonymous the same investment, but to innovate, streamline procurement processes, selling, trading, new ways of sharing, automated data logging, efficient resource management, customers, inventory, delivery, or viral propagation as in social media, etc etc.
This type of dynamic of business, enable Internet business that an investor is set in your project and decides to invest, it is possible to invest 10 and get 50 or 100 in a relatively short period of time. Unlike a bar or a shoe shop or a consulting business websites developing, professional photographers, or SEO, where for each customer need more eating a dedicated resource investment in these resources much of his possible return.
To achieve a scalable business, only we do with the help of technology innovation and ingenuity, and streamline these processes to reduce human intervention and interaction in the elementary process to zero, where possible. Thus, processes are efficient and streamlines the business, but then you need people (Programmer to maintain the system, but one can manage 10,000 people/customers or 100,000 or more).
This reduction of human interaction and intervention, not only has to be on the staff of the company, may also be in the process between users of the system because it is not allowing them to enter endless and fruitless negotiations to limit the options available to the most obvious of ways that there is the possibility that they become inefficient, also make a self-service process, allowing as gas stations do everything themselves inter-acting with the own product/system.
Another key innovation is to invent new ways of doing business usual process bringing benefits to the parties through technology, saving time, costs, rising prices, availability, or creating new opportunities previously unavailable. As you see it does not seem complex at first, right?. Another day we see examples of scalable business.