Scalable vs. Non-Scalable Careers

Professions where you are paid by the hour are not scalable. A prostitute who charges $100 an hour only has 24 hours in a day. At some point, she will hit a ceiling on her earnings. Similarly, dentists, lawyers, contractors, bakers, and consultants can see only so many clients at a time.

By contrast, scalable professions allow you to make more money without an equivalent increase in labor / time. An author writes a book one time and his effort is the (basically) the same whether he sells 500 or 500,000 copies. A Hollywood actress need not show up at every screening of her movie to make money off it.

This is a simple but remarkably important point.

11 responses
The flipside of this is that in a "non-scalable" career, one can often just work more and make significantly more money, as opposed to being a salaried professional where hours don't determine compensation.
Into which category does founding a startup fall? You create something and make it grow, but have to keep improving... seems scalable to a point but like an author do you eventually have to write another book? Is there an internet analog to the classic book which will keep bringing in revenue perpetually?
This is why VCs don't invest in service based businesses like consulting or law-firms. They aren't scalable.

The big returns come from the technology that 2 entrepreneurs use to get their e-mail powered blogging software in front of millions and millions of viewers!!

Oops, I meant to say, yes, Entrepreneurs are in the scalable category.
Software is as scalable as it gets. Write once, sell a million times. =)
Absolutely Garry! I couldn't agree more. This is the only reason I am in the software business, not prostitution!! ;-)
Don't knock non-scalable work. If you wanted to be a rock star, or author, etc. there are very few winners and many losers. Most actors are forced to wait tables to make ends meet, whereas dentists (and prostitutes) have the ultimate job security. In Nicholas Taleb's book The Black Swan, he advocates for non-scaling day jobs and scalable side projects. For investing, instead of putting all of you money in stocks, he suggested (well before the current bust) having most of your money in T-Bills and just a little bit in highly risky start-ups. Let the black swans work for you instead of against you.
I agree, but I don't think anyone's knocking non-scalable jobs.

While you're young, why not take a shot at something scalable, and learn a lot of wild lessons along the way. If it doesn't work and responsibilities start to pile up, you'll lower your risk profile and add some more consistent work.

Everyone's got their own risk tolerance.

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