"How do we scale this?"

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One of my favorite questions travel hackers ask is “how do we scale this?” The implicit answer is, usually, “we don’t.” Contrary to what economists pretend to believe, the world is in fact chock-full of arbitrage opportunities. What is true is that most of those opportunities are difficult or impossible to scale.

Here’s my personal breakdown of techniques used to increase scale, and the obstacles to doing so.

Brute force and constant returns to scale

The most obvious scaling strategy is to multiply your own effort. If you have a technique that generates a known amount of value per hour you spend on it, then you can get twice as much value by spending twice as much time, usually up to some limit. In a simple example, if it takes you an hour to manufacture $10,000 in in-person spend at one grocery store, and you have identical access to five grocery stores, then you can spend 5 hours and manufacture $50,000.

Automation and transformations

A lot of high-volume travel hackers focus on automation as a way to scale their techniques, and automation is one of the many tools I put in the broad category of “transformations.” Transformations are when the design of programs can be understood differently by the customer than by the business in order to scale techniques, either to get a higher return from the same amount of time or money, or to reduce the time or money needed to get the maximum return.

To give a classic example from my own practice, for many years the US Bank Flexperks Travel Rewards Visa offered 3 points per dollar spent on charity, worth up to 6% when redeemed through their travel portal. They also coded Kiva, the microlending website, as charity. People were thus able to earn as much as 6% in travel on loans of as little as a few months, and many of us did, transforming a modest discount on charitable giving into an extremely high-yield investment vehicle.

A more contemporary example is the rewards (often branded as “Kasasa”) checking accounts that offer some of the highest-earning, most liquid savings vehicles. They typically require 12-15 debit card transactions along with a direct deposit in order to earn their advertised rates. Meeting these requirements as they intend would seem to require, as they intend, reorienting your entire financial life around doing so. But when you’ve broken down the requirements to their individual parts, you can transform meeting them into a matter of a few minutes per month.

American Express cards have acquired a reputation of being “coupon books,” but a lot of the pain of redeeming those coupons (and getting back the value of your annual fee) can be transformed into painless routines:

All these are transformations: the company wants them to dominate your thoughts, but a few simple calendar reminders can guarantee you maximize the value of each credit without having to keep track of any of them individually.

Teammates, comparative advantage, and the benefits of trade

I call teammates everyone you partner with in order to take advantage of different circumstances, what economists call your “comparative advantage.” These can take all sorts of forms: some people have access to grocery store manufactured spend while other people have access to gas stations. Some people have more Chase cards than they’ll ever be able to maximize the value of, while others pile into American Express cards and are blocked from signing up for new Chase cards.

A lot of bloggers have a kind of “view from nowhere,” where every person has access to every credit card and each can follow prescribed steps from scratch, but it takes almost no experience to know that’s absurd. Every individual travel hacker’s situation is different, and it takes only a little more experience to identify which parts of the game you’re interested in pursuing most intensively. Finding other people with complementary interests is a way to scale each of your efforts by getting the most value from the parts of the game you’re most interested in.

The most obvious candidates for teammates are family members, precisely because there’s usually not any need to “divide” effort or results at all: everyone gets to go on the family trip, regardless of whether they made a “fair” contribution to paying for it at all. Some bloggers have affected to call these teammates “Player 1,” “Player 2,” and so on.

Employees

One of the most common questions people ask when they find out about the existence of travel hacking is, “that sounds great, but I don’t want to do it, can I just pay you to do it for me?”

There are people and situations that make this possible, but fewer than people wish or expect. The main problem is that almost anything you can train people to do on your behalf, they can do on their own behalf. You are the middle man, and unless you have both knowledge and money that are impossible to steal, your employee will quickly get the drift and go to work for themself.

The Verge had a humorous story about this very phenomenon in my home state of Montana, where resellers would continuously set up drop-shipping warehouses only to find their employees, having mastered the skill of packing and unpacking Amazon shipments after a few months simply set up their own tax-free reselling businesses.

Readers as force-multipliers

Another way to scale a technique is simply to share it. This has all the advantages of the techniques above.

Brute force techniques will have more people applying more brute force and yielding more benefits.

If you know how to transform a technique from difficult to hard, then more people will save more time and effort.

If you know how to trade personal or regional advantages with other people, then telling them how will result in more benefits for everyone in those situations.

And if you tell people how to hire employees to solve their problems, then more people will have their problems solved and more people will be employed.

The problem, of course, is that you don’t get a cut. What’s up to you is how big of a problem that is.