Facebook, or as it's now calling itself, meta platforms, until a recent stockdrop, had a market cap of around a trillion dollars. Do you see facebook as a scaling success story, or as a cautionary tale about scaling? I see it is both. Facebook is a great example of a good that has network externalities. If only two of my friends are on facebook, actually not a very important service for me. But if all of my friends and all of their friends are on facebook,. that becomes much more valuable to me.
In a new book called The Voltage Effect, the economist John List — who has already revolutionized how his profession does research — is trying to start a scaling revolution. In this installment of the Freakonomics Radio Book Club, List teaches us how to avoid false positives, how to know whether a given success is due to the chef or the ingredients, and how to practice “optimal quitting.”