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Comment by ef4 | Hacker News Reader

This article is not using a correct definition of "scalable".

A business that needs more staff to service more customers is still scalable, as long as each staff member generates more revenue than they cost. McDonalds is awesomely scalable.

If you insist on limiting yourself to zero-touch businesses, you'll find yourself competing with all the other geeks who are afraid to go out and sell and build business relationships. On the other hand, if you're willing to build high-touch relationships, you'll discover opportunities that you would have never otherwise found.

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Agreed. We just started sending an email to anyone who signs up for a free trial for our software asking when they're free for a one-on-one phone demo. This has increased sales more than anything else we've ever done, and the amount of time it takes is easily worth it.

Sure, it's a bummer that we'll have to hire a few more customer service people as we grow, but it's much better than the alternative. You open up so many opportunities by being willing to do something as simple as talking to someone on the phone.

I think you're unjustly attacking solo businesses by saying that we're a bunch of geeks afraid to talk to people.

You can definitely scale in headcount and try to build a Freshbooks or Harvest and have millions a year in revenue, or build a business that requires touchy sales and commission payments. Or you can be like Amy and Thomas with Freckle and have a very minimal organization that nets a few hundred thousand.

It's a lifestyle choice, and neither approach is the "right" one.

I'm afraid to report that you have also abused the term "scalable". You have instead described something normally called the Marginal Product of Labour (MPL). I believe the claim in the OP is to the effect that Groupon's MPL is flat or even declining and have to concur with the assessment that a high-touch business model requires huge technological support to remain competitive.

Indeed your own example, McDonalds, is a prime example of this. They are not particularly notable as a human business, rather they represent a case study in very high efficiency supply chain management and process optimisation.

I don't disagree that a strong and skilled front line enables enduring customer relationships and opens many doors. But the recommendation - to do so with a clear eye for efficient processes & systems - is exceedingly sound.

I thought McDonalds was a real estate and leasing company? McDonalds only owns about 15% of its restaurants, it doesn't have as many employees as you think.

This simply highlights how efficient they are. The franchise operators are subject to the same systems & processes irrespective of ownership.

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