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Scale Matters: What Mountain Climbing Taught Me About Building Moats in Business

James Lord

A few weekends ago, I found myself huffing and puffing up a steep trail, wondering why I thought hiking would be a good Saturday activity. But somewhere between catching my breath and admiring the view, it hit me – this mountain was teaching me the same lesson I'd recently absorbed from Hamilton Helmer's "7 Powers": Scale advantage isn't just about being big; it's about being smart about where you put your energy.

 



The Power of Scale Economics

 

You see, in business, just like in hiking, preparation and strategy matter more than brute force. One of Helmer's most practical insights is about Scale Economics – the idea that as your business grows, your unit costs should decrease. But here's the thing: this isn't automatic. It's not just about getting bigger.

 

Let me break this down with a real example. Think about a local coffee shop versus Starbucks. The local shop might make better coffee (fight me on this!), but Starbucks can buy beans at half the price because of their scale. They can spread their marketing costs across thousands of stores. Their mobile app development cost are divided by millions of users.

 

But here's what most people miss – Scale advantage isn't just about being the biggest. It's about being intentional with where you create that scale.

 

Making This Work for Your Business (Yes, Even if You're Small)

 

Here's my actionable advice, learned from both Helmer's wisdom and years of working with growing businesses:

 

1. Start with one thing – just one – where scale could dramatically lower your costs. For my brother’s restaurants, it was about using one food distributor instead of five for his various restaurants.  Don't try to scale everything at once. 

 

2. Build systems before you need them. When I was helping a friend's e-commerce business, we spent three months building inventory management systems when they only had 100 orders a month. Overkill? Nope. When they hit 1,000 orders six months later, their costs per order were 40% lower than competitors because the system was already in place.

 

Think of it like preparing for that mountain hike. You don't start training the day before. You build your stamina gradually, deliberately, and with a clear plan of which muscles you need to strengthen.

 

The Reality Check

 

Here's something Helmer doesn't emphasize enough in his book, but I've learned through scars and victories: Scale advantages take time to build, and they're not sexy. While everyone's talking about their latest marketing campaign or their fancy new product features, you need to be okay with spending time on the unsexy stuff – like optimizing your warehouse layout or standardizing your customer service protocols.

 

 

Your Next Step

 

Start small but think big. Tomorrow morning, look at your business operations and ask yourself: "What's one process that we'll need to do 10x more of in the future?" That's your starting point for building scale advantage.

 

Remember, just like that mountain trail, the path to scale advantage is steady, sometimes steep, but always rewarding if you're strategic about where you put your energy.

 

What scale advantage will you start building today?

 

 

*This post was inspired by Hamilton Helmer's "7 Powers" and years of learning things the hard way so you don't have to. If you found this helpful, share it with a fellow business leader who's thinking about scaling their impact.

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