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This is such a straw man conversation. Of course it is a fallacy to think "I could build that in weekend" and translate that to a claim about the inefficiency o

This is such a straw man conversation. Of course it is a fallacy to think "I could build that in weekend" and translate that to a claim about the inefficiency of a company. I think that's what is being responded to in this thread. But that's not the interesting debate. A better consideration (imho) is this: For a given business/offering/product, what is a likely optimal number of engineers needed to continuously deliver the product's value efficiently? Then: How far is a given company from that optimal number? This is a hard analysis to do. It is virtually impossible to quantify or put this kind of evaluation in a laboratory. There are too many counterfactuals that would be at play. We really just have to consult our experience and consider which of these is the more probable: (1) A business/offering/product team with lots of money is really good at utilizing its hundreds of staff. OR (2) It's not. I've seen a few (2)s from the inside. I have never seen a (1). Therefore I lean more probabilistically toward the belief that a company is needlessly big. What surprises me is that that's not where people on this thread are leaning---but has anyone on this thread actually ever seen a (1)??? If not, where is this belief coming from? I've never seen a ghost, so I don't believe in ghosts....

notacoward 10y ago
Consider, for the sake of argument, the possibility that perfect efficiency is unachievable. Almost physically impossible. As a company gets larger, certain kinds of inefficiency in hiring and utilization become absolutely inevitable. With that premise in mind, how many employees does a company "need"? If it would need fifty in that universe of perfect inelastic spheres with no friction or similar effects, how many times that does it actually need in the real world of such efficiency-robbing factors? In my experience, the answer is two at best and more often, around five. The incremental work product from each new hire diminishes more rapidly than many realize, but the incremental revenue might still make such hires worth it. As Dan points out, a few percent increase in efficiency from optimization can be huge. It might take multiple people quite a while to achieve that, and it will still be worth it. There might be another group of several people trying something else that doesn't pan out, but that doesn't mean they were unproductive dead weight either. Bigger companies have to take risks too. They just take them differently, and the cost is more obviously attributed to them instead of the market. Maybe a single startup could do what Twitter (for example) does, in fairly short order. Even that's unlikely when issues of scale etc. are considered, but that's not even the point. That single startup is not a valid point of comparison, because it doesn't count the cost of failed experiments. Add up all of the startups trying to do what Twitter does, including the failures, and that probably be a better estimate of how big Twitter (Uber, Netflix, whatever) needs to be.
bo1024 10y ago
Well, I think one of the best points the article made was essentially: A company will continue hiring more people as long as the extra profit from an engineer outweighs the cost. This isn't literally true in all cases, but it points out that the business decision of how large to grow is based more on that sort of reasoning than "what's the minimum team that can get X done", and maybe a bit different than the analysis you propose.

notacoward 10y ago

Consider, for the sake of argument, the possibility that perfect efficiency is unachievable. Almost physically impossible. As a company gets larger, certain kinds of inefficiency in hiring and utilization become absolutely inevitable. With that premise in mind, how many employees does a company "need"? If it would need fifty in that universe of perfect inelastic spheres with no friction or similar effects, how many times that does it actually need in the real world of such efficiency-robbing factors? In my experience, the answer is two at best and more often, around five. The incremental work product from each new hire diminishes more rapidly than many realize, but the incremental revenue might still make such hires worth it. As Dan points out, a few percent increase in efficiency from optimization can be huge. It might take multiple people quite a while to achieve that, and it will still be worth it. There might be another group of several people trying something else that doesn't pan out, but that doesn't mean they were unproductive dead weight either. Bigger companies have to take risks too. They just take them differently, and the cost is more obviously attributed to them instead of the market. Maybe a single startup could do what Twitter (for example) does, in fairly short order. Even that's unlikely when issues of scale etc. are considered, but that's not even the point. That single startup is not a valid point of comparison, because it doesn't count the cost of failed experiments. Add up all of the startups trying to do what Twitter does, including the failures, and that probably be a better estimate of how big Twitter (Uber, Netflix, whatever) needs to be.

bo1024 10y ago

Well, I think one of the best points the article made was essentially: A company will continue hiring more people as long as the extra profit from an engineer outweighs the cost. This isn't literally true in all cases, but it points out that the business decision of how large to grow is based more on that sort of reasoning than "what's the minimum team that can get X done", and maybe a bit different than the analysis you propose.