Orders of Magnitude

Over the last few weeks I’ve been going back to some of the things we talked about during our Stanford CS183C class on blitzscaling last quarter — I think I’ll do a set of posts of the ~10 most interesting insights over the next few weeks.

But one observation occurred to me in the context of a different class that I’m teaching this quarter with Huggy Rao and Sujay Jaswa at the GSB — titled “Startup HR.”

We were talking about recruiting today, and had a guest speaker from Google’s excellent People Ops group talk about how Google has recruited and grown. I think it’s fairly clear at this point that Google is among the absolute best recruiting organizations in the world. But when our guest finished his talk and Huggy asked me what I thought, I said this: “Google is an AMAZING huge company. But it’s also a HUGE company. All the stuff that they can do now in recruiting — you literally can’t do any of it as a new startup.”

[A side point that we didn’t discuss: understanding how big organizations recruit is extremely useful in one way — it gives you a bunch of clues how to recruit competitively against them. :)]

That led us into a ton of productive discussion areas, but reminded me, too, to make a point that we tried to emphasize last quarter in CS183: technology companies scale very, very quickly — often growing 2–4x in employees each year. And so there are, literally, 5 orders of magnitude difference in employee scale between a 3 person startup and the 60,000 employees that Google has today. Humans aren’t really wired to understand that difference in scale, especially when it implies a much larger difference in organizational complexity (since the number of relationships in the limit is exponential).

What works at 1–10 might work for a while, but then totally break at 50 or 100. Technology companies nearly always go slowly for a while, and you convince yourself that you understand things. Then things start to work, dn then you go very, very quickly. To make sense & survive any of it, you have to have a profoundly change-oriented approach. You have to understand that any process or organization will work for awhile, then it won’t. So you go in with a sense of intentionality and thinking about what you want your organization to do at any given stage, and you try to design to that, while keeping the wheels on the bus/wings on the plane through some chaotic times.

There’s a lot to be said for understanding what you want your organization to look like at scale — Google is an amazing ideal model — but it’s the 5, 4 & 3 orders of magnitude smaller decisions that put you into a position to play for the big.