Learn more about business with this collection
Understanding the importance of decision-making
Identifying biases that affect decision-making
Analyzing the potential outcomes of a decision
The best and worst examples of the voltage effect
The best example of a product that scaled unbelievably well is Jonas Salk and the polio vaccination. He had an innovation, tested it out on his own kids, and then he ramped it up to test all kinds of different kids. It worked well and then leveraged the healthcare system.
The worst example is the Drug Abuse Resistance Education (D.A.R.E) program of Nancy Reagan. Police officers would go into school classrooms and teach kids about the dangers of drugs. The drug use didn’t fall and, in some cases, actually increased. The program was ineffective because it never had voltage to start with.
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MORE IDEAS ON THIS
The upside of quitting
The secret to high-voltage scaling is understanding when to quit. People generally don’t quit soon enough.
Usually, when someone wants to quit, it is because something went wrong. But, you should think more about the opportunity I’m giving up if I stick with it. If...
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The world of scaling needs a “common sense checklist"
Most scaling failures are complicated. Identifying a list of potential problems before you scale up can improve the odds of success:
- Use incentives that can scale. This applies to creating healthcare or education policy, trying to grow your startup, or just helping you...
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Example of scaling problem
Kmart used to be a highly successful discount department-store chain with over 2,300 locations in the U.S. Their famous in-store promotion was the BlueLight Special, where a great deal would be announced at unknown times. This helped them clear out unwanted stock and gave shoppers an adrenaline ...
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Voltage drop is shockingly common
The voltage effect describes what happens when you move from the small to the large. Most ideas experience voltage drops, when a seemingly great idea loses power as it is scaled.
How to fail at scaling
- You scale a program that was never tested.
- Humans do...
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False positives are a common cause of scaling failures
False positives arise for many reasons such as bad measurement, wishful thinking or simply because the world is messy and it can be difficult to establish cause and effect.
One reason why we don’t make as big an impact as we should is:
- We’re not really sure that this is going to ...
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Most of us think that scalable ideas have some “silver bullet” feature, some quality that bestows a “can’t miss” appeal. That kind of thinking is fundamentally wrong. There is no single quality that distinguishes ideas that have the potential to succeed at scale from t...
JOHN LIST
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Creating evidence-based policy vs. producing policy-based evidence
Moving from creating evidence-based policy to one of producing policy-based evidence is a call to researchers, policymakers and business people to consider the following: If scaling an idea, what constraints should be taken into account when doing the original research?
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Scaling considerations
When a small startup firm or institution has some success and wants to get bigger, they should consider the following:
- Be as diverse as you possibly can, as early as you can.
- Types of diversity are observable characteristics, like gender and r...
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CURATED FROM
IDEAS CURATED BY
Economist John List is trying to start a scaling revolution. He discusses avoiding false positives, the cause of a given success and optimal quitting.
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Related collections
Other curated ideas on this topic:
The Barnum Effect And The Forer Effect
The Barnum effect is also called the Forer effect. Bertram Forer used a fake psychology test on his students then gave them supposedly individualised results a week later. He asked them to rate how well it applied to them. The students rated the accuracy of the statements at an average of 4.3...
Descartes And The Certainty Of Human Experience
The 17th century Frenchman René Descartes had observed how easily our senses are fooled and noted the difficulty of being certain about any human experience, which he claimed can be faked.
We know it too well now with the advent of fake news, fake-reality TV and our fake online identities,...
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