Push and Pull

Beneath much of business, economics and technology sit recurring, structural patterns. Curves, distributions and constraints that appear again and again across nature, physics, networks and human behaviour. Once seen, they become difficult to ignore. And like much of science and its laws, the maths behind these patterns is hard to break or to work against. 

Last week we looked at the curves that we surf. We started with our expectation, for life to be linear, and our hope, of exponential growth, and discovered why neither is ever the reality. 

This week we will look inwards, examining the system within, and I’ll use the example of a founder I sat down with and the unexpected outcome their marketing and sales had encountered while growing.

This is Part 2 in the series, but if you come across this first, don’t fret, it works all by itself or as part of the series. And no one is watching you start here!

Welcome to Push and Pull. The series is Misreading the Shape of Reality, where I examine the hidden structures shaping business, growth and human systems.

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Push and Pull 

Theodore Paul Wright observed that costs fall as production increases. This is driven by both learning and efficiency. In industrial settings, this effect is clear. Processes improve, waste reduces and the speed of output increases. Take the white plastic light switch. One mould is made and in turn it makes thousands of switches. We know exactly how many Polycarbonate pellets it takes to create each switch so there’s little loss or waste. Setting times are measured, so we can make the maximum number each minute. Everything becomes very efficient. But this principle extends beyond factories. 

As founders, we learn patterns. We begin to recognise familiar shapes in problems. Decisions that once required hours of analysis can be made in minutes or seconds. What appears to be speed is often compression, the ability to bypass unnecessary steps because the structure is already understood. We just know, as it happens. Experience, in this sense, bends the curve.

And yet, there is a tension, a balancing element. While scale can reduce costs at the unit level, it often introduces complexity at the system level. With scale there are more communication paths, more dependencies and more people at a higher level, paid higher wages. The organisation becomes harder to coordinate, not easier, which increases costs.

In theory, growth should improve profitability. In practice, many businesses experience that margins tighten as they scale, not because the opportunity has disappeared but because the structure cannot keep pace in the same form. 

Let’s consider construction. Building a small number of homes on site produces waste, inefficiency and inconsistency. Move to a controlled environment, standardise the process with everything in its right place and the results change. In an MMC factory, waste drops dramatically, efficiency improves and quality rises. 

However, layer in management, logistics, regulation and coordination and we quickly see the economic gains begin to erode.

The curve giveth. The system taketh away.

Limits 

Thomas Malthus famously argued that population growth would outstrip resources. For a time it appeared inevitable. Yet as societies develop, birth rates decline while technology layers continue to expand supply. The constraint does not disappear but it moves and Malthus’ exponential growth curve ends with Verhulst’s plateauing effect (see Part 1 for the explanation of those laws). 

From 1900, manufacturing became efficient. Trust then became the valuable element. In 2000, bandwidth was scarce. Now bandwidth is abundant and attention has become the real constraint. It’s worth noting that limits are rarely fixed. They shift, often subtly, forcing the problem into a new form. If you continue solving the old constraint, you remain stuck, while the system has evolved around you. 

There’s a founder I sat with not long ago. It was a similar story to many I see, in fact, a great start for a business by most measures. They had taken their garden design and build outfit beyond £1m revenue with healthy margins, and were growing a solid reputation with a team you would describe as capable rather than chaotic. The business had a nicely niche, premium position and from the outside appeared to have found a solid footing. 

However, something had started to fail. Leads had increased. Marketing had theoretically improved. Sales activity was up but it was not closing quickly like it used to. Looking at the dashboard, it all suggested progress, but revenue was stuck. It hadn’t declined or collapsed, it was just… resisting. 

There was no panic, instead there was too much confusion as effort and outcome were drifting apart. The conclusion when I spoke to the founder was of course - “I think we just need more leads”. 

But the issue is frequently not a lack of leads, despite our tendency to assign blame in that direction. And our founder was trying to make some sense of it all. Very often we are misreading our position on the curve. 

This business had moved beyond the simplicity of its early stage but had not yet developed the structure required for scale. The founder was no longer Head of Sales. And instead of guiding the customer, multiple choices were now being offered. Too much information and too little guidance had begun to slow the system. More importantly, the founder had not realised they needed new skills. Meanwhile their business, at a different size, needed a new structure. 

Effort was being applied as though the system were linear, when in reality it was transitioning between phases. Adding more input was unlikely to solve it. And to be honest it rarely does. 

In this instance we sat and discussed their vision for life. What did they want, how did they want to live, and if levelling up was indeed the correct move, were they willing to learn the new tricks required of them. 

Curves of travel do not respond evenly. At different points, they demand different behaviours. Sometimes persistence is required. Sometimes patience. Sometimes a fundamental redesign of the system itself.

Most founders ask how to grow faster. A better question is often “Where are we standing?” 

Early on, persistence carries you. In the middle, structure begins to matter. Move forwards and reinvention becomes necessary. Same business, different requirements. 

In business, timing is not a detail. It is the structure. Until you understand the curve you are on, every decision can feel heavy and every result will be more confusing than it needs to be. 

Next week, in Value Scales Unevenly, we will move from timing to something more unsettling. Because when you start to understand the curve, you then have to face a harder truth as well. And that is that not everything, and not everyone, contributes equally.

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Musical Eggs 

“everything in its right place” - Everything In Its Right Place by Radiohead 

“too much confusion” – All Along The Watchtower by Jimi Hendrix 

“Too much information” - Too Much Information by The Police