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Comment by jodacola | Hacker News Reader

> headcount is another number to advertise in the game of stock evaluation

This is something I've had difficulty squaring over the course of my career.

If a company remains small but makes boatloads of money because it builds a superior product, shouldn't that be rewarded more than having a higher headcount?

From the perspective of having run engineering orgs (and a few failed - but enlightening - forays into founding a company), I've learned to believe from my experience that having the smallest team reasonable to achieve great things brings the most positive effects: folks are closer to the outcome, feel a stronger sense of ownership, want the best for the business, and reap the rewards of accomplishment, which in turn motivates the team to achieve and innovate more, resulting in growing revenue for the company.

If I were an investor, I'd want smaller teams producing outsized results. Why would I want a gigantic team producing mediocre results?

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Because "growth". A 100 person high performing org looks okay right now. But there's always the "what if" factor. What if you scaled your org to 200 and eek out even more gains for shareholders or start taking on new projects for more growth opportunities. Hedonic treadmill in a way. The baseline for good is relative.

I hear you, and appreciate the response. The bias of my experience tells me that the "what if" factor can be created by a single person experimenting. When the thing that one person created takes off, awesome - hire some more folks to support and grow it. New revenue stream. More ownership by the person who created it. Give folks the time to experiment.

Hiring more people than necessary is, in my mind, akin to gambling. I, personally, hate gambling, and that's probably where my bias comes in on this topic.

Tying it back to my original response: when I say reasonable team size, my implication is reasonable growth based on real results, not just rolling the dice.

To turn the perspective from an engineering leader to that of an engineer (the other half of my career), if I could practice and LeetCode my way into a FAANG and make more than I've ever made to be part of the headcount machine, why would I stretch and innovate? I'd just sit back, do what's expected, and collect.

It's a weird dichotomy, and I fully appreciate that I'm biased in my perspective, which may be detached from reality.

And, again, in the imaginary world where I'm an investor, why would I want a large team built of folks just looking to collect a huge paycheck by being part of the machine?

I can tell you have decade(s) more experience than me in life and the software field in general. So my perspective may be different, limited and different in some ways.

But really different people think differently. Investors are looking at it differently, they're willing and eager to gamble. VC basically gamble for 1 hit out of a 100 bets. But that 1 bet will double or triple their money, then its worth it for them even if they have to write off 100 million in failed bets -- there's probably tax benefits doing this.

I found out about this at one point. I asked a founder, "so investors are just gonna let the company go under? They're willing to write off 5 million in the funding they gave your company?" It was such a irrational thing to me. But looking back, it's not irrational from the VCs point of view.

I agree with you. Some things make no sense as you point out in your comment.

But the people are complex and often irrational, at least from an outside perspective. Imagine aliens observing us, what would they think about how we live and operate.

Reminds me of a Silicon Valley quote -- what a show, it's remarkable how much it accurately depicts the industry

> You're one of Peter's compression plays, huh? Uhh, one of? How many does he have? Not too many. Like six or eight. Ok. Why are there so many? You know how sea turtles have a shit-ton of babies because most of them die on their way down to the water? Peter just wants to make sure that his money makes it to the ocean.

I found an inverse correlation between effort I put in and rewards. The more I coasted, the safer I was politically and the better the salaries.

It’s bizarre.

I suppose it depends. If a company can show impressive growth with a small staff, that's the ideal. But at that point the market/investors will probably ask "if you can sustain this kind of growth without many employees, why don't you hire a bunch and grow even faster?" Of course, that's not necessarily how it will play out (mythical man-month, market size, sales capacity, etc.), but the investors will still get itchy.

A growth mindset is great for an individual, but not a business or whole-scale economy.

I worked as the only developer at one company, one of 5 at another, and one of 50 at the last. The small team is ideal: division of labor, but everyone still kind of knows everything about the whole software package.

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