4 ms·

The only way to win is not to scale. Most of the problems discussed by PG and in this post revolve around scaling company culture, and the associated management

by danjl 2y ago

The only way to win is not to scale. Most of the problems discussed by PG and in this post revolve around scaling company culture, and the associated management style, as the company grows the number of employees. Unfortunately, my feeling is that there really is no great solution to communication problems after a company scales to 20, or 50, or 200 (choose your favorite) people. Modern tools are helping more and more (GDocs, calendars, meeting transcription, ...), but after you get past 15-25 people, you go from everyone knowing everything to something less good. There's no reason that companies "need to scale". You can make millions of dollars without scaling up, and you can avoid many of the problems that kill companies at the same time -- investment overhang, cultural changes, management challenges, and the need to expand your customer base.

camhart 2y ago
> There's no reason that companies "need to scale". Scale tends to bring increased revenue/profits. Starting a business is a massive risk of both time and capital typically. If there isn't the potential to win a big reward, we would have far less innovation happening. Most companies need to attempt to scale to justify the risks. If you want to risk your time and money without the potential for a big reward, thats great. Start a business, make it successful, and start pumping the brakes as you see fit. However, if you do this just be aware that competitors who are willing to scale may come and eat your lunch.
- danjl 2y ago
  You can scale revenue without growing the number of employees. That's precisely why product-based businesses, like SaaS and software in general, are famous. Service-based businesses require scaling employees in order to scale revenue. In fact, if you keep employee growth in check, each employee makes even more money. Further, if you split profits, rather than forcing your employees to wait for the mythical IPO, they can use some of that money much earlier than if you grow employees, take on more investment, generate a huge overhang, give your employees low "startup" salaries, and then get aquahired with common equity getting zero return. In practice, it is far easier to get big payoffs for your employees if you keep the employee count small and aim for an early exit.
bcantrill 2y ago
I agree that startups need to be very careful with adding people -- and that most are not. For whatever it's worth, at Oxide we have long past the scale where everyone knows everything (currently ~75 employees); there is no doubt turbulence ahead as we grow with respect to employees, but I do think that some of our cultural idiosyncrasies (e.g. writing-intensive, recording every meeting)[0] have helped/will be helpful in this regard. [0] https://oxide-and-friends.transistor.fm/episodes/cultural-idiosyncrasies https://oxide-and-friends.transistor.fm/episodes/cultural-id...
- airstrike 2y ago
  Thanks for the link! Basically all of "Demo Fridays, morning water-cooler, no-meet Wednesdays, recorded meetings, dog-pile debugging (aka CSPAN for debugging), RFDs (requests for discussion), no performance review process..." sound like music to my ears
- danjl 2y ago
  What's the benefit to continued employee growth?
  - bcantrill 2y ago
    We definitely have needed (and will continue to need) to add new job functions as we scale as a company -- but we are very circumspect about it!
hn_throwaway_99 2y ago
> There's no reason that companies "need to scale". That just seems silly to me. There are fundamentally lots of problems that require the labor of hundreds or thousands of people. You're not building a jet airplane with a team of 25, nor an advanced computer chip, nor, in AirBnB's case, a global peer-to-peer booking platform. I'm sympathetic to the idea that many companies grow prematurely, or that they grow "just for growth's sake", but I don't like thinking that an answer to a problem is to just pretend it doesn't exist.
- danjl 2y ago
  There may be projects that require more people, but there are many that do not. Why must all companies grow?

by danjl 2y ago

camhart 2y ago

> There's no reason that companies "need to scale". Scale tends to bring increased revenue/profits. Starting a business is a massive risk of both time and capital typically. If there isn't the potential to win a big reward, we would have far less innovation happening. Most companies need to attempt to scale to justify the risks. If you want to risk your time and money without the potential for a big reward, thats great. Start a business, make it successful, and start pumping the brakes as you see fit. However, if you do this just be aware that competitors who are willing to scale may come and eat your lunch.

danjl 2y ago
You can scale revenue without growing the number of employees. That's precisely why product-based businesses, like SaaS and software in general, are famous. Service-based businesses require scaling employees in order to scale revenue. In fact, if you keep employee growth in check, each employee makes even more money. Further, if you split profits, rather than forcing your employees to wait for the mythical IPO, they can use some of that money much earlier than if you grow employees, take on more investment, generate a huge overhang, give your employees low "startup" salaries, and then get aquahired with common equity getting zero return. In practice, it is far easier to get big payoffs for your employees if you keep the employee count small and aim for an early exit.

bcantrill 2y ago

I agree that startups need to be very careful with adding people -- and that most are not. For whatever it's worth, at Oxide we have long past the scale where everyone knows everything (currently ~75 employees); there is no doubt turbulence ahead as we grow with respect to employees, but I do think that some of our cultural idiosyncrasies (e.g. writing-intensive, recording every meeting)[0] have helped/will be helpful in this regard. [0] https://oxide-and-friends.transistor.fm/episodes/cultural-idiosyncrasies https://oxide-and-friends.transistor.fm/episodes/cultural-id...

airstrike 2y ago
Thanks for the link! Basically all of "Demo Fridays, morning water-cooler, no-meet Wednesdays, recorded meetings, dog-pile debugging (aka CSPAN for debugging), RFDs (requests for discussion), no performance review process..." sound like music to my ears
danjl 2y ago
What's the benefit to continued employee growth?
- bcantrill 2y ago
  We definitely have needed (and will continue to need) to add new job functions as we scale as a company -- but we are very circumspect about it!

hn_throwaway_99 2y ago

> There's no reason that companies "need to scale". That just seems silly to me. There are fundamentally lots of problems that require the labor of hundreds or thousands of people. You're not building a jet airplane with a team of 25, nor an advanced computer chip, nor, in AirBnB's case, a global peer-to-peer booking platform. I'm sympathetic to the idea that many companies grow prematurely, or that they grow "just for growth's sake", but I don't like thinking that an answer to a problem is to just pretend it doesn't exist.

danjl 2y ago
There may be projects that require more people, but there are many that do not. Why must all companies grow?