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Comment by corty | Hacker News Reader

I'm not sure why everyone seems so focused on the cafeteria thing. I'm not sure people and their attitudes towards amenities are really the problem here.

From my understanding, the differerence is the companywide attitude to risk. A startup has a "grow at any cost, or maybe perish" attitude. If things go south, bankruptcy will take care of the leftover excess risk (barring criminal charges). A bigco cannot easily go bankrupt, even less a single department. There are tons and tons of capital to eat through if the accumulated risk is realized in cost. So a bigco has to do something about that risk somehow, because most of the company wants to keep what capital it has, only a small part of it really wants to risk things. So the only means to have a situation where you don't risk bigco for a single department is not making it a department. Make it a Ltd. in a holding or something.

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> So the only means to have a situation where you don't risk bigco for a single department is not making it a department. Make it a Ltd. in a holding or something.

I was thinking that as well. Can anyone explain why this isn't common practice?

> I was thinking that as well. Can anyone explain why this isn't common practice?

If you squint a little bit, this is exactly what the whole premise of corporate VC is. Take the funds that you'd allocate to long shots and operate as a VC would, provide strategic distribution where you can add value as a bigco, etc. Problem here is that compared to pure VCs you risk portfolio conflict in a different way that may not be as attractive to founders, but at least it's viable.

It is rare I think because of the parent company's CEO and founders don't like to really lose control to someone else.

A child company is not easily managed (and they shouldn't, but that's scary and risky by itself. The parent company need to have the know-how of an a serial startup builder investor)

The thing with the cafeteria is that it reflects company culture. If you in the office sit at a desk in the Google search engine area or youtube or Waymo is hardly noticable. People have settled in an if the neighboring teams go home at "normal" times, the "startup" team will go home at those times. Also you have a hard time to keep the small team culture when directly embedded. And then corporates encourage changing jobs internal over leaving and hiring somebody else, which means that there are ties on all levels. Pulling out and having your own startup culture is hard. The cafeteria symbolizes that, as it is a social place and culture to large parts is a social thing.

I forgot where I read it but I think statistics show that innovation at BigCo has only succeeded when the team is located at a separate location.

So like, the whole startup thing boils down to being at work late and working overtime, despite all the studies on crunch showing it is inefficient and less productive?

I think that summary is too narrow (i.e. the whole team, maybe even as "us vs. them" thing etc. are part of culture) but yes, for many of those startup guys "do 'hard' work, push things" seems to be an important piece and that's a reason for me to keep my distance.

It’s a combination of risk and forced standardization.

Big companies try to standardize to allow C players to perform as Bs. This crushes As.

I have yet to see this mythical standardization on big companies.

In terms of people being pulled up or pushed down? Look at Walmart for both extremes.

If people really think of founding enterprises as a gamble with potential infinite reward, but limited downside (as bankrupcy will take care of it), I would say our economy has a problem...

It's this that makes entrepreneurship more abundant in the first place. If you have an economy with no risk taking you have no growth and no dynamism. Sure, 80-90% of businesses will fail, it's essential that people can fail without too much personal risk after all, but the 1 in 100 businesses that go onto grow to employ hundreds or thousands thanks to an effective business model are more than enough to make up for the failures. When someone fails in a startup it's not like they drop out of the economy altogether. Its not like they learned nothing. They go on to become effective employees at other companies, producing value there.

Why? Limited downside does not mean small, it just means limited. It can perfectly destroy a person's finances if they invest all their lifesavings in it. And the reward for a company is normally a % of how much value they provide to their customers (yes, I know, not always, but generally that's true). Unbounded does not mean infinite.

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