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In my opinion the whole idea is a little flawed. Is not "software" that has "diseconomies of scale", is the design process. Then, because software has close t
by siscia 10y ago
In my opinion the whole idea is a little flawed.
Is not "software" that has "diseconomies of scale", is the design process.
Then, because software has close to zero of marginal cost the design cost is all the one we end up paying.
Imagine the same milk that the author is talking about, imagine to design the system that get the milk from the cow to 2 people every morning.
Not a big deal, get a cow, a farmer and a truck mix all together and pretty much done.
Now imagine to serve a supermarket, well you start to need something more than a cow a farmer and a truck.
Now imagine to serve a whole city, what about a whole nations? What about the whole world?
Simply design how to serve milk to a small supermarket is a problem, but since the marginal cost of the milk is not approaching zero, the cost of the design process will always be less that the cost of the milk (otherwise it wouldn't make financial sense), hence the whole idea of "economies of scale."
To conclude I believe that the root causes of "diseconomies of scale" doesn't lie in the "software" part but in the "design" part.
- sly010 10y agoSaid differently: Software == Farm Value == Milk
- im3w1l 10y agoUh, what are you talking about? More cows, more farmers and more trucks (pack animals) is perfectly scalable, and how it worked until recently. It's only when you want a singular capitalist to get a cut of all these transactions, that you need to complicate things.
- ajuc 10y agoThe capitalist wins because he can sell the same milk cheaper, because then each farmer don't need own truck, and to bother with going around selling stuff to people. Capitalist will have a fleet of cars, sales team, etc optimized for cost efficiency. Cheaper food means for example - people who couldn't afford to go to vacations, or to buy a computer for their kids - can. So - designing the logistic chain is worth it, it provides value for customers. Same as making software. The design process/writing software on the other hand - is hard to do on big scale from scratch. I'm not aware of any big logistic network that started big.
- kartickv 10y agoDoes it matter in practice whether the diseconomies are due to "software" or "design"? Are you offering a solution to the problem the author outlines?
- siscia 10y agoIf you don't understand the problem you can't really find a solution... Other than that it does matter because in a future you may see the same problem in other industries... A very advanced 3d printer may bring this whole class of problem to the manufacturing industry as an example. If we learn how to manage the complexity of the design phase we will be able to apply the same concepts to other fields.
- biocomputation 10y agoThis is a good argument. It's also why "middlemen" can increase efficiency. It's easier for a farmer to ship his milk to one place than to everyone.