Essay#3 — The village

Time to build the company, not the product.

After another cohort of very interesting guest speakers at CS183C, it is time for me to write the third essay about scaling companies. The main shift from tribe to village seems to be the shifting role of the CEO, as he/she transitions from someone who builds a product, into someone who builds a company that builds a product (wonderfully phrased by Brian Chesky). This signifies the shift in the role of the CEO from a necessary polymath to an execution officer.

Building a company means finding people, and that means hiring. While the same heuristics for good hiring — that one should hire for culture and fit — still exist at the village scale, this might be the first time that the CEO cannot conduct all hiring himself. This means delegating, and therefore doing more by doing less becomes more important than ever.

Now while the hiring process might change through the change in the role of the CEO, the roles that the company hires for, and therefore the people it hires, might change as well. For the first time, it seems that the company might benefit from not hiring generalists, capable of preforming any and all feats, but instead hire for specific roles. The danger I see with this is that though the company has survived its first few steps, the company can still be (and probably will be) highly delicate, and hiring for specific roles might bring with it people that do not feel the startup hunger. And with a workforce that is not willing to give 110%, this can become a real problem during troublesome times. This danger is more easily seen at the previous two stages, but that only makes it even more important at the village stage. I am currently reading Ben Horowitz’s fantastic book “The Hard Thing about Hard Things”, and it seems that the message is that a devoted team can save the company, even at the edge of the abyss.

Aside from these tips and insights in how the organization needs to change in order to survive at the village stage, I enjoyed several surprising pieces of advice from the speakers.

- Judge decisions by their expected value and not their outcome.

I do not know whether this is a common narrative in the valley, but it seems like an excellent way of thinking about and judging complex decisions where the outcome is uncertain to some degree.

- It might be harder to develop a second product within a company, despite the seemingly advantageous access to capital and people. The reason is that developing a second product comes with internal friction from workflows & people that have optimized (and maybe even been hired specifically) to work on the initial product. What is especially interesting about this is that there seems to be a stark contrast in companies in the valley that manage to move to multi-product companies and those who don’t. Take twitter for example. I will not attempt at a full fledged analysis as to why several executives have jumped ship and the stock price has tanked, but one striking feature of the company seems to be that it really only has one main product, where other social networking companies hold several profit-generating products in their portfolio.

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