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How does total number of employees is a good proxy for success of the company? In my opinion, total number of employees is a bad proxy as it fundamentally masq
by dm8 9y ago
How does total number of employees is a good proxy for success of the company?
In my opinion, total number of employees is a bad proxy as it fundamentally masquerades the unit economics and profit margins once they have revenue in several multiples of millions (which is what founders should have on their mind all the time if growth is healthy). Also, naturally logistics related startups will have more full time employees vs. pure SaaS company. Venture business is run by outliers. And 2 of the outliers of last 5-6 years were Instagram and WhatsApp - both of which had less than 50 employees at the time of sale.
Would love to hear thoughts of YC on this.
- 2arrs2ells 9y agoWhen I went through YC, one of the things the partners beat into our heads was "more employees ≠ success." I don't think that's changed. I see the headcount guidelines for YC Growth not as a belief that "headcount = success," but instead an attempt to create a batch of companies facing similar challenges - the people challenges that come as a company grows from 50->150. If you can avoid the 50->150 problems by scaling your company's impact without having to scale headcount, that's incredible! You might not need YC Growth.
- allenleein 9y agoWhatsApp only needs 50 engineers for its 900M users back then (After Series B).