[sjtindell]

I’ve become convinced that hiring more people is generally a warning sign. A team of between a few and about twenty people seems to produce all the good stuff. Anything beyond that, your value per employee drops drastically, and your cost per employee goes up as you need to offer higher and higher salaries to stay in competition. A company going on a hiring spree is now a negative indicator for me. I think FB, Goog, etc. could lay off thousands with no adverse effects and in fact an increase in velocity, quality, and quantity of new features/products. Sometimes one person can be much more productive than a whole team. This is obviously unscientific, just a feeling I’m getting lately.

[asien]

> I think FB, Goog, etc. could lay off thousands with no adverse effects and in fact an increase in velocity, quality, and quantity of new features/products.

You can add Airbnb,Netflix,Uber they often attend conference to describe their architectures.It’s obvious most of these people have no idea what they are doing have no clear direction. They are just havin’ fun will trying to navigate corporates politics. Even the stuff that is published online it’s scary to see their is no technical leadership what so ever.

To be fair I’ve worked in fortunes 500 as well, 60% of the workforce can be replaced with automation.

Since it’s cheaper and less risky they just keep hiring people for repetitive tasks , it compensate the technical debt.

[jiggawatts]

There was a post here recently where a Netflix employee was proudly showing off their log processing system. Which was collecting the equivalent of nearly 2 MB of logs per minute of user streaming time.

In my mind, that's just bonkers, and no amount of handwaving could justify it.

[lbriner]

There is a lot of tokenism in hiring. A Fortune 500 might be marketing a new "push to AI" or whatever and want to seem legit by hiring loads of people, quickly realising that it doesn't work like that but at least it looks good on paper.

FANNG type companies are more likely to do a big hire after doing a big raise. Imagine someone has given you $300M, what do they expect? Now you have the money, we want more features = more sales = more ROI. How do we do that? By hiring a load more people and again learning that it doesn't work like that. Leave it a year or 2 and the same investors complain about burn rate so you lay them off.

[matwood]

Just a note, that ABNB did a huge layoff at the start of the pandemic which allowed them to come out the other side a much stronger company. Actually highlights your point.

[Apocryphon]

Seems the problem is that these massive companies hit a threshold in size and then everything is about self-perpetuation by creating large moats, even ones that don't make sense, hence you have teams and entire departments engaged in boondoggles that are wastes of time and resources.

Imagine Facebook pouring untold manpower and money into developing original content such as cloning HQ Trivia, for its also-ran streaming content that no one watches. Or even Facebook Reel, which mostly just reposts TikTok and Instagram material. Or the entire hopeless arena that is cloud gaming, where all of these tech companies are involved in with no service that has really taken off yet.

I suppose if the regulatory environment was to correctly deter these companies from staying so big and content and engaged in wasteful behavior, there would be actually more companies, and all of those people in the companies you mention would be distributed across smaller, nimbler, more customer-focused firms, with more competition and thus better choices for consumers. That's the theory, anyhow.

[captaincaveman]

Yeah but which thousand ...

[jen729w]

I’m fascinated by the idea that, once a company reaches a certain size – let’s say 100 – then it is, by definition, average. Any claims to be above average may be summarily dismissed.

This exhibits most clearly in large IT integrators. I know, I work for one. The marketing spiel makes me feel sick.

If I were ever to start a company – I probably don’t want the stress – I’d want to keep it small.

It is for this reason that I find Apple fascinating. They have their issues but if there is a company that seems to have somehow escaped this jinx, they are it. (I know, I know, YMMV. Please don’t turn this in to an Apple thread.)

[samwillis]

They way I had it described to me was that the optimal number of direct reports to one person is 7 (hence why military squads tend to be about 8 people). All companies go through growing pains as they reach ~7^n people and have to put in another layer of management. So about 7, 50, 340, 2400…

In reality most companies will have a 2-3 founders running it and so those numbers are more like, 14-20, 100-150, 700-1000.

I have never worked somewhere with larger teams so I may well be wrong, however there is definitely a step in small businesses with two founders at about the 20 people point.

[jpgvm]

Netflix for many years was an outlier because of the stupidly high bar they kept for engineering hires. Obviously that all fell apart a few years ago and have since diluted their talent pool into mediocrity but I still think it's a counter-point for the argument that you can't maintain a high quality team into the ~200 engineers range.

[KingOfCoders]

I also found working in smaller companies more effective (worked in 20 people, 500 people and 30.000 people companies).

DHH recently said at a conference on how people always tell him they were happy when the company was small, and asked "Why scale then?" (the panel agreed that some things, like building a commercial airliner might take large teams).

This has been to my heart for years https://www.radicalsimpli.city/

Looking at HN, enjoying the single founder SaaS threads, this is the future for a lot of business models.

[abnercoimbre]

Do you believe we're favorably headed that direction already? Or would it require a lot more conferences highlighting this, getting mindshare buy-in, etc?

[xtracto]

Back when i was testing so setup a startup I proposed a crazy idea to my cofounder: Let's setup an equity programme where every time a new person is hired, a chunk of equity would be taken directly from the existing employees(including founders!!), and would go to the new hire.

So that 2 founders would start with say 80% of the company (20% was for VCs) , and after hiring the first hire, he will get 20%, and founders will be left with 60%. After the 2nd hire 1st hire would give up 5%, and founders 10% to get 15% ...

My idea was that this would disincentivise hiring new people, so that new people would be hired only when absolutely necessary .

I'm still planning on experimenting with this at some point in my life.

[yardie]

Doesn’t this already happen at most startups. Each round dilutes the founders share and dilutes the shares of existing employees. The VC might have targets like, acquire 10m users or generate $40m in revenue, and that might not be possible with a team of 5.

[DavidPeiffer]

I could see that working while hiring is exclusively by the founders, but what would be the plan after there are departments with mostly autonomous hiring functions? Would the allocation continue to come from all employees, the manager of that department, or everyone upstream?

It's an interesting concept, but it feels like there would be significant pitfalls any way I think if it.

[lbriner]

As others have said, there are some gotchas with the idea but you could probably do something similar that doesn't involve stock like with a profit-sharing fund or a fixed amount to spend on your socials or something!

[thrwyoilarticle]

>Anything beyond that, your value per employee drops drastically

True but not fatal. Being equal to the first employees isn't a requirement: as long as the employee creates more value than they cost, it's worthwhile. Facebook is a simple premise that could be (and was) created with a skeleton team but it's still worth hiring the person to work on Linux's networking stack if that enables them to make it more efficient.

[FredPret]

Here’s another thought: Decreasing communication costs decreases the optimal organization size.

In the days of horse-delivered mail, you wanted all your employees in one big building, and you wanted to cover all the functions inside your own org so you don’t have to send many slow, expensive letters.

Fast forward to email and zoom and automated SaaS businesses - there is very little friction in engaging a third party to do the things you don’t specialize in. You don’t need any employees beyond your core team anymore.

[bigpeopleareold]

I say I will agree with this first.

The worst company-level experience I saw in my career was seeing over-hiring only with a massive downsizing later on. It was during that time, that first employee I was directly involved in hiring was part of the layoff. A company that goes acquisition crazy and trying to boost staff rapidly seemed at first like a good thing. In my case, I saw sales staff grow a lot. However, executive leadership, with whatever responsibilities they have, will always have different agendas. Hiring sprees can probably build credentials for managers, whether or not it is a good investment in the first place.

Hiring sprees and acquisitions towards some business goal that doesn't match the current product goal can also cloud judgement on what can actually be delivered. If your product is optimized for a certain set of things, but it is being sold for other use-cases because "meh, we need to compete", you create a multi-year issue when that business plan fails (in an R&D perspective, since that's only what I am interested in.) I bet this is exactly going to happen to Coinbase. Just jumping on that NFT craze instead of developing out their core business more is probably an example that can be relatable (but I am speculating here.)

[ackbar03]

Failure of the nft platform is cited as a negative by the employees here though

[xiphias2]

The worst thing in having too many people working on the product is increased code size / code change velocity.

Compile time per person and code understanding time per person grows linearly with the number of people (which grows exponentially as revenue grows), which means that the total time people are spending with understanding the code base & total compilation time for the code server grows quadraticly with number of engineers (+ exponentially with revenue).

Total code size should be kept under square root of number of engineers in an organization probably to keep product velocity OK, and engineers should spend significant time minimizing the number of changes in the code base after they have the first proof of concept.

[kilroy123]

I too think this and I have no data or anything to back this up. Just a cut feeling as well.