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The Voltage Effect: How to Make Good Ideas Great and Great Ideas Scale

John A. List

4.06 · Rating details · 330 ratings · 44 reviews

A leading economist answers one of today’s trickiest questions: Why do some great ideas make it big while others fail to take off?

“Brilliant, practical, and grounded in the very latest research, this is by far the best book I’ve ever read on the how and why of scaling.”—Angela Duckworth, CEO of Character Lab and New York Times bestselling author of Grit

“Scale” has become A leading economist answers one of today’s trickiest questions: Why do some great ideas make it big while others fail to take off?

“Brilliant, practical, and grounded in the very latest research, this is by far the best book I’ve ever read on the how and why of scaling.”—Angela Duckworth, CEO of Character Lab and New York Times bestselling author of Grit

“Scale” has become a favored buzzword in the startup world. But scale isn't just about accumulating more users or capturing more market share. It's about whether an idea that takes hold in a small group can do the same in a much larger one—whether you’re growing a small business, rolling out a diversity and inclusion program, or delivering billions of doses of a vaccine.

Translating an idea into widespread impact, says University of Chicago economist John A. List, depends on one thing only: whether it can achieve “high voltage”—the ability to be replicated at scale.

In The Voltage Effect, List explains that scalable ideas share a common set of attributes, while any number of attributes can doom an unscalable idea. Drawing on his original research, as well as fascinating examples from the realms of business, policymaking, education, and public health, he identifies five measurable vital signs that a scalable idea must possess, and offers proven strategies for avoiding voltage drops and engineering voltage gains. You’ll learn:

• How celebrity chef Jamie Oliver expanded his restaurant empire by focusing on scalable “ingredients” (until it collapsed because talent doesn’t scale)
• Why the failure to detect false positives early on caused the Reagan-era drug-prevention program to backfire at scale
• How governments could deliver more services to more citizens if they focused on the last dollar spent
• How one education center leveraged positive spillovers to narrow the achievement gap across the entire community
• Why the right set of incentives, applied at scale, can boost voter turnout, increase clean energy use, encourage patients to consistently take their prescribed medication, and more.

By understanding the science of scaling, we can drive change in our schools, workplaces, communities, and society at large. Because a better world can only be built at scale. ...more

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Published February 1st 2022 by Currency

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Apr 30, 2022 Kate Marchand rated it it was amazing

Shelves: giveaways

Thanks to Currency Publishing for a hardcover of this great book in exchange for a fair review.
Chapter 8: Quitting is for Winners. Yes!
Great book with lots of insight and great research. Not the boring business book you might at first think. 😊

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Feb 08, 2022 Diego rated it really liked it

People who think about building the next Amazon or Google often wonder, what is the recipe? What are the fatal mistakes that kill an organization before it scales? This book will resonate with anyone who has worked in Silicon Valley, because those are the questions it explores. It analyzes a number of common ways in which things go wrong, and what might be done to avoid them.

The first part of the book is a brief summary of recent behavioral economics findings. It talks about some common biases People who think about building the next Amazon or Google often wonder, what is the recipe? What are the fatal mistakes that kill an organization before it scales? This book will resonate with anyone who has worked in Silicon Valley, because those are the questions it explores. It analyzes a number of common ways in which things go wrong, and what might be done to avoid them.

The first part of the book is a brief summary of recent behavioral economics findings. It talks about some common biases that lead us to believe that a small experiment will replicate at scale. Example: McDonalds wants to know if people would like a more expensive burger, so it runs a focus group. The participants love it. They launch the product, but it flops. It turns out that the focus group was not at all representative of the customer base, it was a self-selected bunch of McDonalds fans. This is selection bias.

The author draws many examples from his tenure as the resident economist for Uber and later Lyft. These companies were rich sources of live data, and experimental playgrounds for all sorts of tricks. One of the most important lessons of this book (which is well known in Silicon Valley) is that before investing heavily in a new product or service, you want to do a cheap and small test first. The crux of the matter is ensuring that the test gives you valuable information. This means that designing these experiments is completely nontrivial, and List shares numerous examples of his failures and successes.

Another important point that will be familiar to Silicon Valley readers is the trap of the Sunk Cost Fallacy. This is, failing to recognizing the signals of failure and cutting your losses because it feels bad emotionally. You do not want to continue wasting money and time on something that has a high chance of failure, when you could instead be trying something new. A less well known example is the marginal utility of a dollar spent. You may be spending $100 on Facebook ads and $100 on Google. Is that the right split? Do not look at the average value, but at the value added by the last dollar. It could be that ten more dollars spent on Google gives you 50x the value of spending them on Facebook, so shifting to 90/110 would give you much more for your money. Diminishing returns often go unnoticed when you're not paying attention.

The book is a quick read, and very enjoyable. I thought List spends perhaps a bit too much time panning Uber with the benefit of hindsight. Also, even though he makes a good attempt at being rigorous and scientific there is a fair amount of anecdotal evidence and opinion in the mix. Those are minor flaws in my opinion. In short, this book is worth reading if any of these are true:

- you are a fan of behavioral economics.
- you want to start a highly scalable, venture funded startup.
- you are interested in how to implement effective public policy at a national scale.

If you are already running a startup and most of this book surprises you, then you probably were not well prepared. Read on and reduce your odds of failure! ...more

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Feb 12, 2022 Jacob rated it it was amazing

This book was great! At first glance, it may seem like a generic business book about scaling organizations, but List’s background in running field experiments makes for a much more compelling read. He has experience conducting experiments in academia, at ridesharing companies, for the federal government, and in program evaluation for an education nonprofit in Chicago, among others. Drawing from this experience, List explains some key reasons why ideas that succeed in pilot studies never take off ...more

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Feb 27, 2022 Adrian Hon rated it it was ok

It's rare for someone to tell you how much they hate workers. That's what you'll find in this book – but I get ahead of myself.

For context, I don't read a lot of business books, so this book may be no better or no worse than your average rah-rah airport book for harried execs looking for a new edge. The reason I got it is because Tim Harford (FT, BBC) recommended it on Twitter. I will have to be more skeptical of Harford's recs in future because this book wasn't just disappointing, it was quite ...more

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Mar 11, 2022 Jason Furman rated it it was amazing

Shelves: social_science, nonfiction, economics

An enjoyable, reliable and wide-ranging guide to how to scale ideas. The book includes a lot of economic lessons applied to questions like how to scale a business, a nonprofit, or a policy response. Most of these are familiar to students of economics and psychology but it is their application that is most interesting, including ideas like the dangers of false positives, generalizing from non-representative samples, lack of spillovers and economies of scale, and the importance of thinking on the ...more

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May 07, 2022 Andy rated it it was ok

Scaling, especially for non-profits and social programs, is an important dilemma in need of effective solutions. This book features some good wordsmithing around that, like the analogy about ingredients instead of chefs. And it promotes the general idea that we should do more of what works and less of what is useless or harmful. Unfortunately, the specific content consists of quite a lot of sloppy hogwash.

Alternatives for understanding about successful scaling:
Factfulness: Ten Reasons We're Wro Scaling, especially for non-profits and social programs, is an important dilemma in need of effective solutions. This book features some good wordsmithing around that, like the analogy about ingredients instead of chefs. And it promotes the general idea that we should do more of what works and less of what is useless or harmful. Unfortunately, the specific content consists of quite a lot of sloppy hogwash.

Alternatives for understanding about successful scaling:
Factfulness: Ten Reasons We're Wrong About the World – and Why Things Are Better Than You Think
Prescription for a Healthy Nation: A New Approach to Improving Our Lives by Fixing Our Everyday World
The Health Of Nations

Factfulness Ten Reasons We're Wrong About the World – and Why Things Are Better Than You Think by Hans Rosling

Prescription for a Healthy Nation A New Approach to Improving Our Lives by Fixing Our Everyday World by Tom Farley

The Health Of Nations by Leonard A. Sagan

Nerd addendum:
-His experience/credibility with regard to social programs is mainly the Chicago Heights Early Childhood Center. But with a quick search I couldn't find evidence that this program is a scalable way to improve the percent of poor kids who are ready for kindergarten.
-One of the main examples he uses in the first part of the book is the drug-absuse-prevention program DARE! and he makes a big deal of describing this as a "false positive." I looked up the reference he cites for this about the original Honolulu study. It's not even a false positive. It's just a weak evaluation of a weak program. They did pre-post surveys of kids and teachers and reported on irrelevant process measures like people "found the program enjoyable." This is not a solid experimental design and it does not include the relevant outcome of drug use. So this should never have been convincing as a basis for scaling it up across the country for decades. That would have been very important to explain for this topic of scaling, as opposed to improperly using this as an example of a "false positive."
-He incessantly refers to Uber and Lyft as "ride-sharing" services. This seems like propaganda. The business model does not involve people doing some sort of carpooling. Serious news outlets use "ride-hailing" to describe these companies.
-The stuff about "risk compensation" (p.90) is dangerously wrong:(https://slate.com/technology/2021/11/...). People trot this out all the time to oppose preventive measures. But the original paper on how seatbelts make people crash into brick walls was weak. The overall impact of seatbelt laws, airbags and other such things has been to save many lives. He also mentions bicycle helmets here, completely missing the evidence that indicates the exact opposite of what he's talking about, i.e. American adult bicyclists who wear helmets tend to be more risk-averse than people who don't wear helmets. He also neglects how in places where bicycling has been scaled up (Denmark, Netherlands, etc.) bicycling is much safer and people mostly don't wear helmets (because bicycling is so safe). How does that work? That would have been good to explore in a book about scaling. But it shows how the book goes out of its way to avoid basic public health principles, even though that's an area where humanity has very successfully scaled up lots of things.
-There's an anecdote about the company called Arivale that for an exorbitant annual fee was supposedly going to help people live longer. He depicts this as a "promising experiment" that failed to scale only because it was too expensive. However, once again he fails to present solid evidence (like, for example, an experiment) that it actually worked in the first place to do what it was supposed to do, i.e. prevent illness and extend life. ...more

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Mar 29, 2022 Andy Auger rated it it was amazing

Awesome book on false positives and scaling. Real world examples throughout. Reminded me of Good to Great. Couldn't put it down! ...more

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Feb 10, 2022 Zunian Luo rated it it was amazing

What’s your secret sauce—the chef, or the ingredients? This is but one of several important questions you need to ask yourself in order to successfully scale, according to The Voltage Effect—a Michelin star cookbook in the world of scaling that gives a fresh perspective on what to do (and not to do) in your scaling journey. Much like a well-crafted meal, a scalable idea requires several essential ingredients, ingredients which Head Chef John List calls the five vital signs. Through bite-sized ch ...more

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Apr 10, 2022 Cyrus Samii rated it liked it

It’s a decent book, but sometimes dumbed down to a degree that I found annoying. I don’t think I’ll ever use the term “voltage” in the way List hopes people will.

List is a very interesting and creative scholar, and I did enjoy hearing about his journey.

Based on his academic and applied work in industry, he derives some factors that may help you in assessing whether you really are ready to take a product or intervention to scale:

Are your inferences from the research that you have done reliable? C ...more

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Mar 23, 2022 Jarrod Hoffman rated it really liked it

John List writes fascinating stories and data in a humble and provocative way. I learned quite a bit through the read and I was grateful for the many economic definitions he shared. My only unmet desire was a slightly deeper dive into the economics, maybe some formulas or graphs, but other than that it was a gem full of practical applications for several areas of my life.

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Apr 14, 2022 Anders Nielsen rated it really liked it

Great book with lots of stories on why scaling works and don't work and how to run field experiments on big datasets.

Main reason for me to not give it five stars is that lot of the basics has already been covered in other books ...more

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Apr 15, 2022 Ben Rogers rated it really liked it

Shelves: entrepreneurship, sociology, economics, psychology, self-help, business

I thoroughly enjoyed this book.

I got a lot out of it.

How to scale ideas, behavioural economics, and what makes programs and policies work.

A lot of this is pertinent to my career, and I really appreciate List's excellent writing in his own exciting career.

I would highly recommend this if you are interested in behavioural economics - something I love. Think Kahneman or Ariely.

Admittedly, I found the last quarter of this book a little underwhelming, but the rest of the book was outstanding.

4.4 ...more

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Feb 14, 2022 Jean rated it it was amazing

fascinating. quite informative.

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Feb 21, 2022 Chad Schultz rated it it was amazing

Interesting books with aspects of business, economics and psychology.

Nominally, it's about common errors when "scaling up". Taking a restaurant to a business with over a dozen locations; rolling out an experimental program from one school to hundreds of schools; that kind of thing. Not all of the studies and advice references seem to be directly related to that, but it is all interesting.

I feel that some of the main lessons of the book are:
1) make sure your test group is fully representative or ...more

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Feb 17, 2022 Fernando Hoces de la Guardia rated it liked it

Interesting insights from the research done at private sector, but the constant hubris of taking credit for well stablished ideas (eg claiming that he came up with the idea of evaluating the cost-benefit of public policies in the margin) made it hard to enjoy

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Mar 16, 2022 EC rated it it was amazing

The Voltage Effect is a much-needed addition to the econ/business/management literature: finally, a book that not only shares *ideas* but actually focuses on their implementation – in particular, how to make them work at scale.

The book offers a framework and practical toolkit for scaling that can directly be applied to real-world business ideas or policies. It is basically structured as a checklist, reviewing chapter by chapter various issues to be aware of (hello, false positives and spillover ...more

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Mar 12, 2022 Matthew rated it it was amazing · review of another edition

I finally finished #thevoltageeffect by John List. This is an excellent book, and a great companion piece to ”Influence is Your Super Power” by Zoe Chance. John is a world-class behavioral economist with broad experience in higher education, government, and industry. In this book, John draws on his research to tell us why some ideas scale and why some fail.

The book is divided into two parts. The first part examines five fundamental reasons why an idea/product/project will fail to scale. And par ...more

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Apr 24, 2022 Ben Bentzin rated it it was amazing · review of another edition

Highlights why some businesses and policies scale and others don’t

John List offers an insightful and research based analysis of five key reasons why ideas don’t scale and approaches that increase the likelihood that an idea will scale. Concepts from the author’s field of economics are explained in easy to understand terms. This book will be particularly useful for entrepreneurs and policymakers wanting to scale their ideas and anyone interested in understanding more about the fascinating field o ...more

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Mar 02, 2022 Daniel Myers rated it liked it

The book in some sense is a compilation of what List has learned throughout his career… none of his concepts seem novel, however he does a good job pushing the reader to take a deeper look into things…. He definitely sees himself and other good data guys as white knights here to fix the worlds problems, while also caveating and pointing out that people almost always miss factors that affect scaling (data guys included)

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Mar 26, 2022 Veronica rated it liked it

Listened to this on a road trip, so that may be why it is a 3 because it is hard to listen when u are doing that many consecutive hours. He talks about social economics, studies and how/when to take smaller studies/data successes and scaling them to a bigger population. What to look out for, how quitting can mean winning, how important an organization's climate is to it'sy success and a ton more....very interesting. ...more

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Mar 31, 2022 Alana rated it it was amazing · review of another edition

I personally would own this book for chapter 8 (Quitting is for Winners) alone.
This is a must-read book for people trying to make an impact in this world. It covers the logistics of acheiving goals for businesses, customers, and even oneself. The advice/recommended strategies for creating effective changes or results are novel and and very relevant to the problems, big and small, or today, and the stories told effectively illustrate the significance of each suggestion.

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Mar 16, 2022 Bitsy Kemper rated it it was amazing

Fascinating! I’m not even in the biz world anymore, but loved everything about this book. And you don’t have to be an Econ major like me to find it as fascinating as I did. Great insight into human behavior, not just how or why products/businesses fail. My husband is glad I’m finished reading so I can stop talking about it lol.

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Mar 20, 2022 Kevin Postlewaite rated it it was ok

This book is reasonable for what it is but it claims to be something different.

This book is fine as an introduction to economic and statistical thinking but if you're already familiar with this kind of thinking and widely-known results all you'll get is some not-very-compelling anecdotes from the author. ...more

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Apr 30, 2022 Ryan Kalin rated it it was amazing

'The Voltage Effect' highlights the significance of considering what can be scaled in (primarily) business, but also in everyday life and decision-making. It is an enthralling read and highly applicable to everyday life. This is a highly influential work, and will certainly induce a positive effect upon both the future of "self-help" literature and its readers. ...more

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Mar 17, 2022 Thaijason rated it it was amazing

Just finished the Voltage Effect and really enjoyed it. Book was super digestible - clear on the takeaways without having to hammer example after example. I found the excerpts on Lyft Pink particularly helpful - I'm actually working on a subscription package for my current company. ...more

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Mar 26, 2022 Cody rated it liked it

Definitely like his ideas, but good lord, please stop telling us about all the fancy CEOs you know, all the companies you’ve saved, all the struggling nonprofits who’ve come to you desperate for help, and all the money you’ve made or saved businesses or governments. Typical white savior economist.

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May 05, 2022 Steve Dunn rated it liked it

Meh. Little groundbreaking here and be sure you get a dash of his politics. Also I occasionally get the feel that he has some confirmation bias going on or what I think is slightly different in that he finds a way to explain results regardless of them to fit his desired result.

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Feb 09, 2022 Elizabeth marked it as to-read

Shelves: npr, economics, uchicago

As heard on The Indicator from Planet Money:
https://www.npr.org/2022/02/07/107895... ...more

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Mar 05, 2022 Surya rated it it was amazing · review of another edition

Shelves: will-re-read, non-fiction, audiobook, history, economics, psychology, business, science, behavioural-economics

A great guidebook to scaling ideas.

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Mar 06, 2022 Masayuki Arai rated it it was amazing

many points to remember !

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About John A. List

John A. List

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Professor John A. List is the Kenneth C. Griffin Distinguished Service Professor in Economics at the University of Chicago. His research focuses on combining field experiments with economic theory to deepen our understanding of the economic science. In the early 1990s, List pioneered field experiments as a methodology for testing behavioral theories and learning about behavioral principles that ar ...more