> The reality of an agency model is that to scale revenue you have to hire more worker bees.
And the worst part is, it scales linearly \cue groans\. Funny how in business, that's terrible (it's literally the worst it could possibly be to have a potentially profitable business), but with algorithms, it's the holy grail.
Interesting point BTW about reduction in quality of workers over time. (Like the pretentious-but-true saying "A-players hire other A-players. B-players hire C-players, and C-players hire losers") I've noticed the same trend though in product-centered businesses where I've worked. Unfortunately, I feel like the fact that the amount of work to be done doesn't scale linearly with revenues actually exacerbates the subsequent-employee-quality-decline-problem because even if the new guys are less... good, the company is still making more money so nobody except the coworkers and managers of these people (who actually have to work with them on a daily basis) even cares.
It's probably not a problem at places like Google and Facebook, but it was kinda heartbreaking to watch my super-talented and motivated dozen-person startup team become something completely different because we were growing so fast and were told to spend money and hire like crazy after taking an investment round.
Regarding your comments on hiring quality workers- that is interesting. Wouldn't the specific things you mentioned all be solved by the founder (presumably an A-player) continuing to make hiring decisions?
Really enjoyed thinking about your point that revenue outpacing effort enables employee quality decline. Maybe a way to force employee quality on a company would be to continually take on enough work (new/side projects, say, sort of like we see with AWS) such that the company will only survive if employees are good quality.
Assuming optimum talent and project selection, it should scale sublinearly. The N+1th worker bee will be less productive than the Nth, and the N+1th project will have a be willing to pay less than the Nth in terms of $/unit output.
I think it's even more bleak than that, because adding the N+1th worker bee adds N new communication paths, unless you start segmenting people into org trees, which at that point you now have to maintain managers and middle managers.
> And the worst part is, it scales linearly \cue groans\.
Actually, If they specialize their tech stack sufficiently for fast prototyping and take equity in these super early ideas, that should not be a problem as they could be in for the long game via equity.
And the worst part is, it scales linearly \cue groans\. Funny how in business, that's terrible (it's literally the worst it could possibly be to have a potentially profitable business), but with algorithms, it's the holy grail.
Interesting point BTW about reduction in quality of workers over time. (Like the pretentious-but-true saying "A-players hire other A-players. B-players hire C-players, and C-players hire losers") I've noticed the same trend though in product-centered businesses where I've worked. Unfortunately, I feel like the fact that the amount of work to be done doesn't scale linearly with revenues actually exacerbates the subsequent-employee-quality-decline-problem because even if the new guys are less... good, the company is still making more money so nobody except the coworkers and managers of these people (who actually have to work with them on a daily basis) even cares.
It's probably not a problem at places like Google and Facebook, but it was kinda heartbreaking to watch my super-talented and motivated dozen-person startup team become something completely different because we were growing so fast and were told to spend money and hire like crazy after taking an investment round.