Comment by esikich
20 hours ago
Sure. You start a PC repair business. At first, losing a stick of RAM or frying someone's motherboard is super costly when you are doing 10 a week. But once you're doing 1000, that's pretty damn good and easily covered. When you have more tools, velocity, and whatnot, the proportions change.
Wouldn't you lose multiple sticks or fry multiple motherboards as you scale and do 1000? If you're frying 1 at 10, that means you're frying 100 at 1000. Your costs etc will scale as well unless you actually lower the risk/reward ratio, no?
I think the point is that at small scale a single accident poses a risk of ruin to your small operations.
> I think the point is that at small scale a single accident poses a risk of ruin to your small operations.
At big scale, a single big accident poses a risk to ruin your big operations.
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The point is that if you have a 10% chance of frying motherboard, at 10 a week, you might expect 1 fried p/w, but it could easily be more which may be catastrophic.
At 1000, the number of fried boards will be more predictable and therefore the risk to the business is lower, even if the long-run averages are the same.