Obsession with scale is a fiat disease.
Seeking to get big when you're profitable makes a lot of sense. You can make even more money by scaling up. But what's really odd these days is that a lot of people want to scale even when they're not profitable.
Anyone with a modicum of common sense can figure out that this is not a good idea. If you multiply a negative number by a large number, you get an even bigger negative number. You're only going to lose more money. And that's true. You will lose more money, in a sound money economy.
In a fiat economy, things are a little different. If you're growing, that can be leveraged for additional loans on the potential to make a profit eventually. There's a lot of newly printed money floating around and it debases constantly, so more people are willing to take risks with their money. So malinvestment is common and unprofitable companies can suck in a lot of it.
Not all of these companies are bad, of course. Amazon famously made no profits for years to scale up. But for every Amazon, there's buy.com, boo.com, pets.com and so on. It's a gamble like with any unprofitable business. Sometimes you hit, sometimes you don't. The point is that the new money entering the economy often goes to stupid things and big things are what get attention. Thus everyone tries to scale massively.
Under sound money, profitability is first. You don't want to be losing something that's scarce. Thus, delaying scaling to maintain profitability is the logical choice. Businesses grow more slowly and cash infusions are much less common. That means they are generally much more hardened to market disruptions, because they last.
Family businesses used to last many generations. Heck, many last names today reflect the occupation of the ancestors that had a long-lasting business. A profitable venture that lasts is something you hold onto. It's also what we should be focused on instead of the fly-by-night, scale fast, rent-seeking culture we live in.
Sound money businesses will be very different than what we're used to.
