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the resistance is the weakest.
MANAGEMENT 269
Chapter 19
Stay Small
Believe it or not, it s hard to keep the size of a company
as small as possible while trying to grow as fast as
possible. There seem to be unlimited opportunities and
the only way to take advantage of them all is to add
more people and more infrastructure.
The fact is the bigger you get physically the more
unwieldy and lethargic the organization becomes. Go
BIG companies aren t trying to add as much headcount
as possible quite the opposite. They are looking for
ways to keep headcount low so that they can operate
faster and more efficiently.
I ve had the good fortune to lead great companies from
two people to over 500 people and I can tell you first
hand that the bigger they get, the harder they are to
operate efficiently.
270 GO BIG OR GO HOME!
Fortunately there are some very deliberate approaches
you can take toward keeping the company lean and
mean even as it grows. A word of warning, though
these are approaches you will need to implement over
the long haul they aren t quick fixes! A company that
intends on staying at its fighting weight needs to
constantly keep in shape.
MANAGEMENT 271
Avoid Bureaucracy like the Plague
Startups have the ability to instantly communicate
across the organization literally! At Swapalease.com
we have less than 20 people on staff and we all sit in
one room without any walls. When we need a change
of strategic direction I can stand up at my desk, address
everyone and in a few minutes we are headed in a new
direction.
A large company cannot possibly do this. Large
companies like GiantCorp tend to gravitate toward
layers of management with hierarchical reporting
structures that are slow and filtered.
The last thing you need as a Go BIG company is layers
of management and longer reporting chains. I ve seen
this happen, too. I ve seen startups with ten people who
already have a management reporting chain from the
CEO to a VP to a line worker. For some reason these
companies feel like they should reduce their speed of
communication as quickly as possible!
Startup companies should avoid this type of
bureaucracy like the plague. Any structure that slows
down communication within the organization is hurting
it. Startups need to maintain their quick
communications and open discussion policy as a key
asset.
272 GO BIG OR GO HOME!
Here are some ways to help reduce the bureaucracy in
your own organization:
1. Report in, not up. You need as many
open lines of communication as possible. There
is no reason why an intern shouldn t be able to
walk in the CEO s office and share his mind.
Every time someone has to report through
someone else to share their ideas you slow down
communication and risk filtering valuable input.
2. Get a room. Yes, get a room just one. By
that I mean do not get individual offices that
keep people from talking to each other
regularly. At Swapalease.com anyone in our
office can see what I m doing from their desk
(and vice versa). You d be surprised how many
more ideas are shared when someone doesn t
need to compose an email just to say something.
(It also keeps people from surfing eBay all day.)
3. Take away titles. Titles give people a sense of
entitlement (what a surprise, right?). People
seem to love having big titles to confer their
importance, but I will say in a startup they do
more harm than good. Who cares if you are the
VP of Marketing if there isn t anyone in your
department? If people think they need a title to
confer respect or authority then they really don t
have any to begin with. Instead of conferring
titles upon people, simply give them
responsibilities. It s a lot harder to hide behind
responsibilities than it is a title.
MANAGEMENT 273
Keeping the organization light and well-communicated
is not hard to do. It just takes an understanding and
appreciation of good communications. The very asset
that allowed you to outmaneuver your larger
competitors by reacting quickly and making split-
second decisions could be the one that destroys you
when you give it up to the next new guy.
Recommendations:
" Do everything humanly possible to keep the
bureaucracy out of your organization. It may
find its own way in, but you don t need to
accelerate the process!
" Take advantage of the ability to speak to
everyone at once. If you can t get everyone in
one big room on a daily basis then try pulling
them into one room at least on a weekly basis.
The more opportunities you can create to share
ideas, the better.
" No ten-person company should have a reporting
hierarchy. It s just ridiculous. No, that s not a
recommendation. It s just a rant, but hopefully
it will help you at some point in your
development!
274 GO BIG OR GO HOME!
Remove the Human Element
I know this might sound like a directive from
Montgomery Burns of the Simpsons, but it s not quite
as dire as it sounds! In order to keep the company light
and nimble, you need to avoid adding people-intensive
processes.
Most companies solve problems by throwing people at
them. For example, when more phone calls start
coming into the call center a CEO might immediately
think, we need to hire more phone support personnel!
It s times like these when I want you to ask yourself,
can we solve this problem without hiring more
people?
It s not about being stingy with your payroll. It s about
being efficient with the use of your resources. Take a
look at a company like Craigslist.org that services
millions of customers per month with its online
classified ads and forums. Did you know that they
handle all of this volume with just 18 people?
I asked the founder, Craig Newmark how they did it.
Here s what Craig told me:
We're trying really hard to keep our company
growth very slow, since dysfunction grows with
size, using some techniques including:
MANAGEMENT 275
" More "self-serve" functionality, which people
prefer anyway.
" Continuous improvement of the way we do
things. For example, customer service people
figure out how to work smarter, than ask tech to
improve their toolset.
As you can see, it s not about removing people
necessarily. It s about putting them in positions to be
more effective so you don t have to add more people.
Here are a few places where removing the human
element can really help out:
1. Teach customers to fish. Look at what Craig
said about customer service. Instead of staffing
more people to answer customer calls and
requests, his team looks for opportunities to let
customers help themselves. It s like the old
adage about teaching a man to fish. Give your
customers the tools they need to service
themselves so they don t need to be more reliant
upon you.
2. Hire fewer robots. Every company hires
robots. They are the people who do exactly
what they are told to do no more, no less. The
problem with hiring robots is that they don t
think about what they could do to avoid having
to do the same task over and over. They see
getting the task done over and over as a good
job. What you want to find are people who
will look for creative ways to let technology or
276 GO BIG OR GO HOME!
some other mechanism do the task for them.
3. Automate everything. These days you can
automate a hell of a lot of processes that used to
take people to do. Whether it s setting up an
automated kiosk for customers to purchase from
you or building an online knowledge base for
customers to answer their own questions
automation is everything. At Swapalease.com
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