On the one hand, in economics, there is a well-known and well-studied economy of scale: when two smaller companies merge, it lowers their costs and thus, makes them more effective and therefore more competitive. At first glance, this advantage of big size would make economy dominated by big companies -- but in reality, small business remain a significant and important economic sector. Similarly, it is well known and well studied that research collaboration enhances researchers' productivity -- but still a significant portion of important results come from individual efforts. In several applications areas, there are area-specific explanations for this seemingly contradictory phenomenon. In this paper, we provide a general explanation based on first principles. Our reasoning also leads to a new explanation of the ubiquity of Zipf's Law -- a wa that describes, e.g., the distribution of companies by size.