1. Start a company that does a thing well
2. Hire enough people to do the thing well
3. For some reason, hire more and more people to do more and more random things
4. Hire more managers who hire even more people
5. You are now a complicated mess and can't get anything done
6. Run out of money
7. Fire people and write a sad post. Continue to collect hefty CEO salary.
Why not just stop at 2?
1) you won't attract any follow-on investment capital;
2) your original investor will be angry that you're sitting on a pile of money that is doing nothing;
3) you will likely grow slower than your other competitors. in some markets, this is death, in other markets, this is fine.
Patreon had nearly 500 staff before layoffs. Now has about 400 staff. You may have a hard time understanding what all those people do, but I suspect they're all quite busy.
That's just not how VCs work. Basically it's you HAVE to always show hockey stick growth.
Steady 5-10% per year isn't good enough. It has to grow exponentially. So that's why you keep hiring and keep spreading out the service into a whole bunch of other areas.
I'm guessing 100 managers at least. Busy hiring more people to staff their perpetually understaffed teams, each doing some disjoint initiative.
The danger is when a startup seeks to grow just for growth sake. Hire way more people than we really need so we attract investors by showing rapid growth is their modus operandi. That approach has actually worked enough that many companies are willing to travel that risky road. But that road is also littered with casualties.
Because your investors will never allow that. And without their money, you cant even reach #2.
I don't know if it's the right business call, but Uber is like 10 different companies now.
You don’t need VC cash to start a successful company but the time horizon is much longer.