Diseconomies of Scale

May 26, 2021
We've all heard of economies of scale. Some things have diseconomies of scale.

We’ve all heard of economies of scale: the increase in per-unit efficiency by producing or doing a large number of like things. This simple concept is probably the single biggest idea responsible for the industrial revolution.

And it’s become such an implicit part of our thinking that we often forget that not everything benefits from economies of scale. Some things have diseconomies of scale. Some things have both, with an inflection point of maximal efficiency:

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Finding this point is rarely easy in a practice as complex as software development, but it’s worth making an effort to at least get closer to it!

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