Making individual instances bigger is not a good thing, it makes everything more centralized.

I agree. I think one of the easiest ways to encourage users to bring up more instances is to minimize the requirements and steps needed to get a Kbin or lemmy instance running. Its not a very complex process to get an instance running, but it can be difficult to locate the relevant information you might need to spin up an instance without reaching out for support. That could end up putting people off of setting up an instance.