Here are the eight laws of super-scalability
Let's talk about the 1 billion benchmark club
It was a monumental event that no one noticed. Just before 1800, the number of people on earth had climbed to what was then believed to be an astronomically large number – 1 billion.
While this was indeed a landmark event, the occasion past without fanfare. The combination of too few demographers and disjointed communications between countries caused the entire planet to miss the occasion.
Until recently, even the word “billion” was rarely used outside of scientific circles. With the isolation of country borders, few were thinking about billions of people on earth, only millions in each country.
Even in academia, before the invention of the calculator, working with billions was tough.
It wasn’t until the 1970's that the concept of globalization started to creep into the vernacular. The Internet hadn’t entered mainstream consciousness yet but telephones, satellites, cable television and a growing number of air services between countries started making the world a more connected place.
First it was computers, then connected computers, and eventually the World Wide Web that began breaking down the barriers for people and business. The once-rare designation of being a multi-national corporation became as easy as launching a website.
If you haven’t been paying attention, super scalable companies have become the hottest thing in business. While Wall Street is enamored with company values, this is less about the money and more about landmark achievements.
Here are some thoughts on how this will play out over the coming years.
Business History – Reaching the 1-Billion Benchmark Club
In a recent interview, Facebook founder Mark Zuckerberg said, ”This may sound a little ridiculous to say, but for us, products don’t really get that interesting to turn into businesses until they have about 1 billion people using them.”
As you can see from this timeline, the number of companies, people, and technology breaking into the Billion-Benchmark Club is growing rapidly.
- 1916 – John D. Rockefeller – With his shares in Standard Oil, John D. Rockefeller became the world’s first billionaire. In 2015, Forbes Magazine reported that number had grown to 1,826 billionaires worldwide.
- 1963 – McDonalds – It took McDonalds 23 years to sell their first 1 billion hamburgers.
- 1968 – Television – First invented in 1927, it took 41 year for the number of TVs to reach 1 billion sold around the world.
- 1980 – 1 Gig Storage – The race to create the world’s first 1 gig storage device was won by IBM with their 3380 storage device, introduced in June 1980.
- 2003 – Bicycles – With over 2 hundred years of history, the bicycle industry crossed to 1-billion bicycle mark in 2003.
- 2005 – Internet – It took the Internet 36 years to reach its first 1 billion users in 2005, but only 5 years more to reach 2 billion.
- 2007 – Netflix – Starting as a DVD delivery service, Netflix delivered its 1 billionth DVD in Feb 2007.
- 2010 – Cars – Its estimated that the number of cars in the world broke the 1 billion-car threshold sometime in 2010.
- 2010 – Google Search – After 12 years of exponential growth, Google reached 1 billion searches a day in 2010.
- 2010 – YouTube – After only 5 years in business, YouTube averages 2 billion downloads a day in 2010.
- 2012 – Facebook – 8.5 years after its launch, Facebook reached is first 1-billion users in September 2012.
- 2012 – Microsoft Office – In 2012, Softpedia announced that Microsoft had officially entered the 1-billion user club for MS Office.
- 2012 – Psy – Korean pop star Psy was the first to achieve 1 billion downloads on YouTube of his music video "Gangnam Style," a feat accomplished in 158 days.
- 2013 – Google Android – The open source software released by Google in 2008 exploded to 1-billion users in June 2013.
- 2013 – Google Play – The app store for Google grew to include its 1 billionth app in July 2013.
- 2013 – Android Phones – On September 2013, Google announced that 1 billion Android devices had been activated.
- 2014 – Mobile Phones – In 2014, worldwide mobile phone subscriptions grew to over seven billion, penetrating 100% of the global population, even reaching the bottom of the economic pyramid.
- 2015 – Uber – After 5.5 years in business, Uber delivered its 1 billionth ride on December 24, 2015.
- 2015 – Didi Kuaidi – China’s home grown version of Uber, reached their 1 billionth ride early in 2015 after only 11 months in business.
- 2015 – Google Chrome – The world’s most popular web browser attracted its 1 billionth use in May 2015.
- 2016 – Facebook Groups – While it sounds ironic to describe an app with over 1 billion users as relatively unknown, Facebook Groups is exactly that, reaching 1 billion users January 2016.
- 2016 – What’sApp – The free text-messaging app, owned by Facebook, broke into the billion-user club in Feb 2016.
- 2016 – Websites – When it comes to the Internet, we will breach the 1-billion website barrier sometime in 2016.
- 2014 – Gmail – Google’s popular email service reached their 1 billionth user in 2016.
- 2016 – Apple – In a recent press release, Apple CEO Tim Cook boasted that ”our installed base recently cross a major milestone of one billion active devices.” This covers all Apple products, from MacBooks to iPhones, to Apple Watches, and some users often have multiple devices.
- 2016 – Music superstar Adele sets a new record with her music video "Hello" reaching 1 billion downloads on YouTube in just 87 days.
NOTE: One-third of everyone on the Internet uses YouTube every day. YouTube now lists 21 video stars who have reached 1 billion views including Katy Perry, Justin Bieber, Taylor Swift, Mark Ronson, Ellie Goulding, Meghan Trainor, Jennifer Lopez, Shakira, Wiz Khalifa, Maroon 5, Major Lazer, OneRepublic, LMFAO and Sia, with several more already in the pipeline to reach 1 billion downloads before the end of 2016.
A Few that Didn’t Make the Cut
The following are popular web properties that have not achieved the status of the Billion Benchmark Club.
- QQ – 860 million monthly active users. (China messaging app owned by Tencent.)
- iTunes – 800 million accounts.
- WeChat – 650 million active users. (Chinese messaging app also owned by Tencent)
- LinkedIn – 400 million active users
- Instagram – 400 million active users.
- Twitter – 320 million active users.
- Yahoo – Home of Yahoo Mail, Tumblr, and more but no single product has 1-billion users.
- Weibo – 200 million users. (Popular Chinese social networking app started in 2015)
- Snapchat – 200 million user base
- Pinterest – 100 million user base
- Netflix – It should be noted that even though Netflix is responsible for countless billions of video downloads, they still only have 75 million subscribers.
The Eight Laws of Super Scalability
Those who are looking to launch a super scalable business have a distinctly different frame of reference than those wanting to start something more traditional. This is both a shift in business philosophy and operational mindset of those involved.
Here are eight of the key principals that permeate this type of business thinking.
- Instantly Global: Whenever a company launches a website, it instantly becomes a global enterprise. Global awareness, followed by global connections, global trust, global users, and eventually, global customers.
- Customer Loyalty First: Customers come fast when products are free, or when the business is based on tiny profits from a large number of transactions. Customers love companies that aren’t perceived as gouging them.
- The Law of Large Numbers: The greater the user base, the more valuable the company becomes. Every interaction has value and there is always room for more interactions.
- Startup Speed: Startups can always move faster, longer, and harder than incumbents.
- User Experience: Every transaction can be improved, speeded up, or made easier to use. All customer experiences have room for improvement.
- Customer Interaction: Every business-to-customer relationship can be hyper-individualized to the exact kind of interaction every customer desires.
- Software and Automation are Far More Scalable than People: Wherever possible, human talent should be replaced by software and automation.
- Customers are More Important than Profit: In the early startup years, growing a user base is always more important than short-term profit.
Super scalable companies require a different mantra, ethics, and attitude. Every product will have a different type of growth curve, and every approach a different set of problems to contend with.
As with Uber, if taxis suddenly become 50% cheaper, that frees up a lot of money to fuel other industries. If Netflix cuts cable TV spending in half, that money will be applied to something else.
With 7.3 billion people on earth, even averaging a penny from every person on the planet creates a substantial income stream of $73 million.
It should also be noted that when things go wrong, super-scalability can also turn into super-de-scalability.
The speed with which a company gets created is the same speed with which it be dismantled.
We have only begun to test the waters with super-scalable companies. We have yet to see the zero-to-100-million-users-in-one-week company, but that too is just around the corner.
Over the coming years, these types of companies will disrupt every existing industry, changing the business landscape tremendously.
While it will be scary for some, the number of new opportunities being unleashed will be truly breathtaking.