The Scale Test
Only back ideas that can go from zero to infinity — then get to 100 million users and monetisation follows
- Difficulty
- Moderate
- Time to result
- ~months to results
- Steps
- 5
- Confidence
- 89%
Schmidt's filter for which company ideas are worth his attention. Most founders pitch him a widget — a better camera, a better dress, cheaper book publishing — all fine ideas that fail his test, because he is interested only in ideas with the benefit of scale: the ability to go from zero to infinity in users and demand. In the age of AI he can describe the shape of such a company generically: apps on Android and iOS, powerful networks, and a large computer at the back doing AI calculations. The monetisation half is equally blunt — give him a business with no revenue and 100 million users and he can find a way to monetise it.
Origin
Schmidt formed the view running Google, where the guiding phrase was to focus on the user and everything else is handled, and where he watched the PC and internet platform waves create entirely new oceans.
Core principles
- 01Scale means zero to infinity in users and demand, not incremental growth.
- 02If you are not using AI in every aspect of your business, you're not going to make it.
- 03An audience of 10 to 100 million people can always be monetised.
- 04Not every hyped technology is a platform — crypto is a specialised, not horizontal, market.
How to run it
- 1
Apply the zero-to-infinity filter
Reject widget ideas and ask whether the idea can go from zero to infinity in number of users and demand.
Watch out Better cameras, better dresses and cheaper publishing are fine ideas that fail this filter.
- 2
Check it is a real platform wave
Distinguish horizontal transformations that touch everyone's daily life from specialised markets that don't.
Pro tip Schmidt's test case: the PC and the internet created a whole new ocean; crypto did not, because people aren't running around all day using tokens instead of currency.
- 3
Build the AI-era shape
Assume apps on Android and iOS, powerful networks, and a big AI computer at the back — the founder's job is choosing which problem it solves.
Pro tip The programming shift is from writing the code to having AI discover the answer.
- 4
Get to 10-100 million users
Focus on the user and grow the audience before solving revenue.
Pro tip With 100 million users and no revenue, advertising, sponsorships and donations can all be made to work.
- 5
Ignore competitors, run ahead
Rather than studying competitors, spend the time on what is possible for you to do from your current position.
Pro tip Running Google, Schmidt says they seldom looked at what competitors were doing.
Watch out Studying the competition is time spent not solving the problem in a new way.
In the wild
An entrepreneur told Schmidt his team would be 95% technical because their product — a switching product claimed to be 100,000 times better than competitors — would simply sell itself.
→ Schmidt agreed the logic holds if they hit the goal: build the right product and people line up outside the door.
Asked whether crypto was a platform wave like the PC or the internet, Schmidt said no — it is important and interesting but a specialised market, not a horizontal one.
→ He reserves the platform label for the arrival of AI, which touches producers, executives, markets and everything else.
Common mistakes
Building a widget and calling it a company
Incremental product improvements have a bounded ceiling on users and demand, so they never reach the scale where the monetisation logic works.
Is it for you?
Best for
Founders choosing which idea to commit to, and investors filtering deal flow.
Not ideal for
Deliberately small, profitable niche businesses where infinite scale is not the goal.
From the transcript
“I'm interested in in ideas which have the benefit of scale and when I SC I say scale I mean the ability to go from…”
“if you're not using AI at every aspect of your business you're not going to make it”
“if you give me any business that has no revenue and a 100 million people I can find a way to to monetize that with…”
From the episode
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Eric Schmidt