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Comment by dhh | Hacker News Reader

Why does it have to scale? 37signals took 11 years to get to 26 people. It might take us another 11 to get to 50. We can optimize for that future when and if it arrives. But making your environment worse today because you worry about some possibly maybe future is the essence of premature optimization.

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For 37 Signals it doesn't have to scale any time soon, but the grandfather was (tacitly) in reference to how many look to 37 Signals as exemplars of how to run small to medium tech businesses (why else write about it in Inc?)

I think if I already had a business of 10-15 people this would be a good model to attempt to follow. If I had a business of 40+, I would be far more wary; the question of scale is for those who may try to fit the model to their existing business.

Many companies need to scale up people as they grow because their ratio of human involvement to revenue produced isn't as high as 37signals'. Almost anything other than the specific style of product development that you guys do falls into this category.

The assumption when you publish an article is that you're doing it to provide examples to others, not just talk about how good you are. In that situation, I think it's fair to point out the limitations and areas where this strategy might not work.

I agree it doesn't have to scale, and you certainly shouldn't setup an organization around projected growth 2 years out. That may never come, and you also may not want it to come.

However, if you want your company to grow into a Groupon or Zynga, and you have the rapidly expanding demand to support that, then you need to scale. I don't think Groupon could run on 26 people, so they needed to scale to get to such massive revenue figures.

I specifically didn't use Facebook as an example because I know your feelings about them. I figured Groupon at least has the revenue to support their valuation :)

You have it backwards. You don't design your company structure in the hopes or anticipation of becoming Groupon or Zynga. You deal with that growth when it happens. You optimize for that scenario when it occurs.

You can't "want" your company into becoming a Groupon or a Zynga by design a certain organizational structure. Startups try that all the time by preemptively hiring tons of people to sit around and wait for the hockey stick growth that never comes.

I know, I'm not saying you should design your organization or hire around the idea that you'll be at Groupon's level in a year. That would be a waste.

Well let me ask you this. When is it the right time to reorganize and evolve from the flat structure because you are growing like gang-busters and can't keep up with the pressure on all areas of the company (support, development, sales, etc.)

I'll tell you when we get there, if ever. Although, as mentioned elsewhere in the thread, there are some good examples of enormous companies running counter-intuative-for-thier-size organizational models and doing great.

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