Scaling: The rule of 3

There is a rule of 3 in writing as well as in speaking. And in my opinion, there is one in scaling too.

I believe the following holds true:

When some output metric — it could be number of employees, number of customers, number of micro-services you have built — becomes 3x the initial number, your technology, funnels or processes will start breaking.

This is a purely empirical observation, but it has been true of every system I have worked on.

I worked at a large company where the number of customers exploded after proper marketing of the product: at about 3x the number of customers (and roughly the same increase in traffic), the code could not longer do what was being demanded of it. It had to be refactored.

At another place, the number of employees (engineers) grew from ~30 to over 85. The HR processes fell apart. We were giving a terrible onboarding experience to new hires. The IT team was unable to handle the new load placed on them. The choices of self hosting many systems caused us to fail.

We had to put in significant effort to redo the problems. We moved to a new HR tool that offered better end to end support. We hired more IT engineers (and thus made the onboarding problem better but also worse). We moved from self hosting to cloud hosted solutions. All this could have been mitigated if we had kept track of the rule of 3, and planned for what systems would start breaking.

I create a personal dashboard of the key metrics in the company. Revenues, # of employees are examples. When these numbers up — a happy event, obviously — I do a black hat exercise to think about what is going to break. And I work that into my strategy as well as the financial framework to ensure that my team and I are well prepared for what is coming.