Is Bigger Better?
Tim Yandel;)
When I hear a founder touting on how much headcount they have or will be increasing to I sometimes wonder about their definition of success. There are many different verticals and industries out there and some industries measure their success in much different ways. The common thread in every startup regardless of industry is that their success is commonly attributed to how big they are. In the age of "get big, then monetize" these founders often use headcount as a proxy for revenue and ultimately, success. This gets my head spinning.
Business Season
Sports and business can easily be in concert together as it pertains to the concept of winning. Go to YouTube and search "inspirational locker room speeches" in the morning and you'll be ready to embark on that day like no other day before. You could even stretch and relate business to war and do the same thing. The fact is, every company instills the philosophy of team from inception and tries to decipher how they will "win" at whatever they set out to do immediately. Since there is rarely a business that has no competition - at least any viable business - there is usually the "enemy" you will inspire your employees or army to battle against during a long, 260 game season. Yes that's longer than a baseball season everyone, it's called business season. Just like there's no crying in baseball, there's no crying in business. But you may be crying if you're success is just measured on size and not on profits... stay with me.
You're Replaceable
Replaceable is a word that no employee wants to hear. While even Google and Facebook are going to the extreme to keep their key employees, it's usually a small business' problem to keep their key employees that they can't lose... But then they get big enough that size will outnumber talent and talent gets lazy because they're not forced to be more efficient - talent leaves to start the cycle all over again. I'll be willing to bet anyone interested that Google employee given the counter offer to stay at Google will not be working at Google in a year. We have two things that are working for me on this bet:
- Google will be looking to have this person brain dump across a mass of people that will collectively act as that one person's replacement.
- This person knows this and took the money to start their own company which will be in time to launch right before the brain dump has been fully... dumped.
Hire less, develop more
One of the main differences in sports to business is that in business, there's no cap in how many people you can have on your team. In sports, it's based just on efficiency and not in numbers. There's no choice on getting larger, there's only a focus on getting the existing team more efficient. There's something to that isn't there? Spending time to develop your people as opposed to having someone else train them for you and then recruiting those people by the dozen, making every hire less important than the last and resulting in attrition when the new hire figures out they're replaceable. Having a smaller team creates loyalty. It just does.
A larger vessel is harder to steer. Some think that the more people you manage the more power you have, but not every good leader is as effective leading a mass of people. But if your vessel is one that is efficient, fast and profitable then your success is right around the corner, and you're just small enough to make that turn.
You need to be honest with yourself as a business leader. What do you consider as your ultimate success? Is it really to become the next Google, Microsoft or Facebook? Chances are that you will fail. If it's to be highly efficient to be bought out by one of those major players, now there's something more realistic. Don't think small, but think efficient.
Reader Comments (8)
You might think it doesn't make business sense for me as a recruiter to preach to people to be more efficient and don't grow too large as I get paid more if a company hires more. But I'll leave you with this: as a company becomes more efficient, they also become more attractive to new hires resulting in a higher amount of quality hires. Reputation is king and if you get a call from a recruiter trying to get you to work for one of the larger shops in town, chances are you already got a few similar calls from similar recruiters that all blend into one making the recruiters become forgettable.
TY
At SevenStep Recruiting, people are shocked when we tell them how small our teams are relative to the number of people our competitors use to process the very same volume of hires. I completely agree with Tim. Hire enough good people and inspire them. Then their productivity will shoot through the roof making for a much more vibrant and attractive work culture.
I get the sense that now a days alot of these smaller development companies now a days actually strive to be bought up by the big boys...I almost worked for one "Hivefire" and their goal was to be bought by Google.
Makes sense, but it almost makes me nervous eventually there will only be 2 companies doing everything and it will be hard for other companies to develop on their own and compete.
Either way very interesting article
I think the example of the revolutionary war is fitting here. The Americans beat out a better equipped, larger and better trained British army because they were forced to do more with less. Bigger often equates to more process and less creativity and input from line level employess. That's exactly why the British soldiers died by the dozen as they marched in perfect order towards the entrenched, strategic American troops. It's also exactly why great developers leave prestigious companies to go to smaller more open minded shops.
Great article Tim!
Good point Kevin - you see that there's a YouTube link for the movie 300... also an example of a smaller, efficient army besting an empire.
Awesome post, Tim. This is a great point, and bragging about company size has often befuddled me. I'd way rather have three Shoguns on my side than a whole army of under-qualified dudes in black pajamas. In fact, I'm always most impressed by the companies with the smallest teams and biggest revenues. If you look at those startups over time, you see that the contributors always go on to build awesome things later as well.
Keep the awesome content flowing, and I'll keep watching for it in your tweets,
Kyle
Thanks Kyle -
I totally agree with you. Take Kayak for example, they run on 1/4 of the staff that their competitors do and they make double the revenue numbers. I think you were with me when we saw their CTO, Paul English, speak at an event in the NERD center about hiring and firing and he maintained a very similar philosophy of developing people as opposed to getting the all in one package deal. Big surprise that they're going IPO soon and crushing headlines with good press.
Thanks for reading and keep up the great work at BostInnovation.com!
TY