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Large vs Small

“For nearly all of history the success of a society was proportionate to its ability to assemble large and disciplined organizations. Those who bet on economies of scale generally won, which meant the largest organizations were the most successful ones.

But in the late twentieth century something changed. It turned out that economies of scale were not the only force at work. Particularly in technology, the increase in speed one could get from smaller groups started to trump the advantages of size.

Large organizations will start to do worse now, though, because for the first time in history they’re no longer getting the best people. An ambitious kid graduating from college now doesn’t want to work for a big company. They want to work for the hot startup that’s rapidly growing into one. If they’re really ambitious, they want to start it.”

http://www.paulgraham.com/highres.html

What do you think?

  • Is small better?
  • How?
  • Why?
  • Do we all want to work for start-ups? (probably not)
  • Why is it frustrating to work in a large company?

From our perspective it’s the flexibility, independence and freedom that comes with running your own small company – as opposed to the lack of control that you (often) have over your own fate in a large organisation.

What do you think?

  • Thomas

    Hi Rob. Thanks for the post and bringing up this issue. Let me start with what is frustrating to work for large companies: bureaucracy, lack of speed, centralism and regulations not reflecting real life.
    Small is better because every employee is close to the market, needs to understand customers and act entrepreneurial. Small organistations can easily adapt to necessary changes (e.g. product portfolio).
    On the other hand large corporations have power for the long haul when necessary. Furthermore they spend a lot for R&D and allow to work on “big things”.
    From a working environment point of view: in large companies it is more likely to work or spend time with colleagues you like (as the number of co-worker is greater). Very often they come from different countries and you find a high cultural diversity. Whereas in small companies/organisations you have to arrange with the small number of co-workers.
    Best regards
    Thomas

    • Rob

      Hi Thomas… great thoughts – thanks for your comment.

      You’re absolutely right about the people in large companies. We worked with some great people at our old place. Having said that, working in a small start-up where you have greater control over your day-to-day means that you can really spend time with whoever you want (in terms of meetings

      You’re also right that big companies often have greater resources to achieve ‘big projects’ – but this sometimes comes with a large dose of risk aversion in my experience. You’re big, you represent the status quo, so you seek to protect the status quo?

      Having said that, there are notable exceptions everywhere of big companies taking the lead and innovating. So it’s by no means black and white.