Team
Few is fun, functional, fast - agile.
We cannot do everything alone. A gross is massive, but not necessarily good. Bigger is rarely better; in particular, employee growth ≠ good. Groups of people have their own physics (e.g., inertia/momentum, action/reaction, etc). Square-cube laws dictate size, weight and agility.
So what's just right?
Much of the ceiling has been described by Dunbar - above 150, it becomes challenging for an individual to maintain deep relationships with more people. The beer test posits the same idea. Extreme misanthropes and introverts skew an order of magnitude fewer, while extroverts target 10x more. However, if teams are going to achieve extraordinary performance, between one-third and two-thirds of individuals' relationships need be outside of the company (e.g., friends, family, external professional network, service providers, suppliers, customers, etc.).
The corollary: healthy professional organizations may wish to avoid scaling beyond 50-100 people. Above ~75, the penalties of diminishing returns thrive due to lower trust, indirect communication and the second-order physics of teams. We would aim more conservatively and put the ceiling at 50 full-time, salaried employees with equity incentives. As a team approaches fifty folks, and certainly beyond that number, things get wonky quickly - not impossible, but far from ideal.
If small is beautiful again, and considering founding teams are often as few as 1-5 people, what's the best model to get from here to there?
The Marines have been iterating on battle-hardened teams for over 243 years. Their nomenclature proves instructive: an individual contributor grows to lead a fireteam of 2-4 others, scaling into a squadron of 10-15 before aggregation into a platoon of fewer than 50. The most highly regarded teams in Naval Special Warfare don't say much about how they run, but that elite organization favors flexibility even further and often keeps teams smaller. They practice winning - as individuals, sure - but primarily as teams, and teams of teams. Leadership is a service business.
Founders form a functional team, starting with their own dynamic. Add external advisors and early team members to fill in gaps. Do not expect investors to fix your team, or really any other problem. Every early team member should be a 3-10x average contributor. If she cannot be a team player, she does not make the team. Each member should be able to lead a team when required.
One rockstar leads a team of three to five. Three to five teams snowball into half a company. Another tripling or two (usually within 18-36 months) and 90% of the outcome has been decided. Half the hiring decisions that matter were made in the first ~10 hires.
Pick co-founders wisely. Hire folks that can lead teams, even if not yet required. Correct mistakes before adding more.
Practice winning, by design.
We cannot do everything alone. A gross is massive, but not necessarily good. Bigger is rarely better; in particular, employee growth ≠ good. Groups of people have their own physics (e.g., inertia/momentum, action/reaction, etc). Square-cube laws dictate size, weight and agility.
So what's just right?
Much of the ceiling has been described by Dunbar - above 150, it becomes challenging for an individual to maintain deep relationships with more people. The beer test posits the same idea. Extreme misanthropes and introverts skew an order of magnitude fewer, while extroverts target 10x more. However, if teams are going to achieve extraordinary performance, between one-third and two-thirds of individuals' relationships need be outside of the company (e.g., friends, family, external professional network, service providers, suppliers, customers, etc.).
The corollary: healthy professional organizations may wish to avoid scaling beyond 50-100 people. Above ~75, the penalties of diminishing returns thrive due to lower trust, indirect communication and the second-order physics of teams. We would aim more conservatively and put the ceiling at 50 full-time, salaried employees with equity incentives. As a team approaches fifty folks, and certainly beyond that number, things get wonky quickly - not impossible, but far from ideal.
If small is beautiful again, and considering founding teams are often as few as 1-5 people, what's the best model to get from here to there?
The Marines have been iterating on battle-hardened teams for over 243 years. Their nomenclature proves instructive: an individual contributor grows to lead a fireteam of 2-4 others, scaling into a squadron of 10-15 before aggregation into a platoon of fewer than 50. The most highly regarded teams in Naval Special Warfare don't say much about how they run, but that elite organization favors flexibility even further and often keeps teams smaller. They practice winning - as individuals, sure - but primarily as teams, and teams of teams. Leadership is a service business.
Founders form a functional team, starting with their own dynamic. Add external advisors and early team members to fill in gaps. Do not expect investors to fix your team, or really any other problem. Every early team member should be a 3-10x average contributor. If she cannot be a team player, she does not make the team. Each member should be able to lead a team when required.
One rockstar leads a team of three to five. Three to five teams snowball into half a company. Another tripling or two (usually within 18-36 months) and 90% of the outcome has been decided. Half the hiring decisions that matter were made in the first ~10 hires.
Pick co-founders wisely. Hire folks that can lead teams, even if not yet required. Correct mistakes before adding more.
Practice winning, by design.
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