Unscripted: Life, Liberty, and the Pursuit of Entrepreneurship pdfdrive com

~ Peter Drucker, Author
SCALE: EXPLODING INCOME
A
productocracy’s fifth and final CENTS Commandment within the 
Fastlane
structure is the Commandment of Scale.

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Scale instructs that legacy value systems must be replicated through 
mass
or
magnitude
while making a profitable impact.
The four definitive components are:
1.
Legacy value system
2.
Replication
3.
Mass or magnitude
4.
Profitable impact
First, your offering must eventually evolve into a legacy system in accordance
with the four prior commandments.
Second, your LVS must be replicable, or easily copied into multiple units,
locations or chains. Optimally, this replication should extend among hundreds
or thousands, if not millions, of units. For instance, software is easily replicated.
The same goes for a website service where increased users and traffic extend
replication. My forum receives over 100,000 visitor sessions per month. In the
ten years I owned my Internet company, I served a multitude of millions.
Physical products like this book also offer replicative elements; my printer can

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print one million books as easily as 10,000. Replication turns one store into
twenty, one duplex into a dozen, and hundreds sold to millions.
Third, replication must have either mass or magnitude. Most people think
scale automatically equates to mass-market millions or operating in multibillion
market size. However, scale can also be graced through 
magnitude
, or the gravity
of your impact. For instance, if you provide housing for twenty families (not
mass market), you’ve scaled by magnitude and probably are doing well—housing
is a magnitudinal endeavor. Sell ten restaurant franchises for your organic,
GMO-free restaurant, and again, brute-force magnitude occurs.
As an example, a forum entrepreneur sources then negotiates industrial raw
materials for both corporations and government. His enterprise is not mass but
magnitude—a few repeat clients and he’s rolling in the millions. Additionally, his
clients are operating in mass, so by serving that market indirectly, he nudges
mass. Aside from confirming the “do what you hate” theme, he touched on
magnitude in a forum Q&A. He wrote:
As far as the activities I dread, of course I still do things I don’t want to do. I don’t
think this will ever change for anyone. This four-day trade show makes sense
because almost every person attending has the power to pull the trigger on seven
figures worth of product. I’m not going to waste my time.
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On the flip side, if you invent an eco-friendly, biodegradable food container,
your magnitude is negligible per unit—the scale occurs through volume. Get
one-quarter of all food manufacturers to use it, and well, you might join the
three-comma club without grabbing a mention in Valleywag.
The fourth element in the definition is a