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Staying small != don't grow business. I would never hire crazy so people in the startup can imagine spinning up new projects new microservice new crazy revoluti
by yeukhon 9y ago
Staying small != don't grow business. I would never hire crazy so people in the startup can imagine spinning up new projects new microservice new crazy revolutionary database/big data/ new KV store/new cache layer out of curiosity.
Till one point, when the business is so big, growing engineering team to over 100 is inevitable. But plently of really successful tech companies did not overgrow their team size for a number of years. E.g Facebook.
Human captial spent is actually the most expensive even comparing space rental if you add up salary, bonus, and benefits. I also will not recommend startups in their early stage (or even until they can break-even for a long time) to flu candidates over. There is really no reason to fly people over until you want to hire that person. Flying and hotel adds up big time too. Google can offer this because spending a couple millions doesn't matter to them.
- elmar 9y ago> But plently of really successful tech companies did not overgrow their team size for a number of years. E.g Facebook. A much better example is WhatsUp with 55 employees at the time of aquisition.
- vertex-four 9y agoThe issue is that the investment market seems to be partially built on selling the idea that you're doing something so new and different that you need all these fancy architectures and hundreds of developers. If you don't sell that idea, you're just another CRUD company so why should anyone invest?
- yeukhon 9y agoLook at all of the really successful tech companies out there, they startrd with tools already available. I see this too often. Everyone has nice ideas and wanted to write something better because they don't like the interface or they had to hack around (look at you Jenkins). We are all guilty of that. But if you hire people and they begin to create new fancy architecture that doesn't pay off, trust me, that money went to waste. This is not even a math problem. Again, find a company out there did not create their infratructure with common solutions and only begin to develop custom solution when they afford and they really needed it. Several years later.
- manmal 9y agoIf you don't break-even, how are you going to employ even two people without an investor? Where does the money come from?
- yeukhon 9y agoIn case it was not clear, I was talking from getting VC money, meaning you already have some cash to run for some months. Why would a VC want to see their money burn to the ground if all they see is hiring 200 people when you really just 100 people?
- elmar 9y agodon't ignore the lack business acumen of some VCs.
- sgroppino 9y agoMostly because they just look at number of users and hope someone will buy the company at a users multiplier valuation and nothing else?
- elmar 9y agoheadcount is a relevant metric to justify higher valuation when you are unsophisticated investor that probably never built a Tech-Startup yourself. "the guys I invested in are killing it they just doubled the headcount" VC pitching LP's for new fund.