It has what economists call increasing returns to scale and huge barriers to entry.
There is reason to believe that like urbanization, virtualization creates generalized returns to scale.
As a focused directory business, we also believe returns to scale and potential incremental operating margin remain significant.
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But once such businesses get beyond a certain size, the authors argue, the returns to scale diminish quickly.
Large countries have bigger internal markets, allowing more specialisation and returns to scale.
So being a first mover in something that has increasing returns to scale and is about information--those are very cool things.
The dynamics are a bit involved but in short export industries will tend to be folks who gain from increasing returns to scale.
But beasts do not enjoy the cities' rising returns to scale.
Second, scientific advance tends to have increasing returns to scale: adding more scientists to a community does not diminish individual marginal productivity but tends to increase it.
Mr Blodget worries that Amazon spends more to generate revenues than he ever thought possible: whatever Mr Bezos says about synergies, Amazon seems to be facing decreasing returns to scale.
Does it have an increasing-returns-to-scale type dynamic involved?
Working either through the charter movement or the home schooling movement would enable a tablet textbook project to start small, yield immediate returns to participants, and scale easily, while largely ignoring the interests of incumbent institutions.
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Vibrant Research is working on snap-in-place fabrication that may scale to mass manufacturing volumes cheaply enough to deliver VC returns.
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"China's city and rural commercial banks don't have the scale of major banks and so need to offer higher returns to be able to pull customers away from their bigger competitors, " Mr. Ye said.
Scale and an uncanny ability to predict commodity-price movements has allowed Glencore to make decent returns in a business where margins are wafer-thin.
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