I assume you are talking about a service, because by and large, a physical product can be scaled easily.
From an investor's point of view, services can fail to scale because of two types of reasons: one, there is no demand for the product, and two, the delivery system has some inherent flaws that hold it back.
Generally, businesses that cannot scale do so because of bottlenecks created by human performance. If the system is largely software, it can scale easily. The bottlenecks can be several: difficulty in capturing user inputs, or difficulty in processing information, or delivering a result to a customer.
Businesses that own hardware also face problems, as this can break down, and require installation, training and maintenance. Placemeter is an example; it is a combination of software and hardware that requires human intervention. This means that it will be slower to scale.
Does this help at all?