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Large companies get larger due to the inefficiency of larger companies. It's like trying to get another 5 mph after hitting 200 mph. After hitting 201-500 empl
by baccheion 8y ago
Large companies get larger due to the inefficiency of larger companies. It's like trying to get another 5 mph after hitting 200 mph.
After hitting 201-500 employees, it becomes almost impossible to avoid politics, bureaucracy, wasted time communicating, oversight, management, etc.
Based on a graph that showed peak productivity with a team size of 6 (https://www.getflow.com/blog/optimal-team-size-workplace-productivity https://www.getflow.com/blog/optimal-team-size-workplace-pro...), one layer of management results in 43 employees (1 CEO + 6 managers/executives + 6 * 6 individual contributors). Two layers results in 259 employees (1 CEO + 6 executives + 6 * 6 managers + 6 * 6 * 6 individual contributors). More than two layers adds more inefficiency/employee than is taken away and such a downward trend continues.
If a fictional 4.6 team members is used, those numbers become 26.76 and 124.096.
- phendrenad2 8y agoUh, the article is about revenue, not headcount.
- baccheion 8y agoIncreased revenue among larger companies is usually due to either having a monopoly, or financial engineering. In the case of larger tech companies, it's a maintained monopoly (and maybe financial engineering) combined with a massive increase in the number of online users.