Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

> There's no reason that companies "need to scale".

Scale tends to bring increased revenue/profits. Starting a business is a massive risk of both time and capital typically. If there isn't the potential to win a big reward, we would have far less innovation happening. Most companies need to attempt to scale to justify the risks.

If you want to risk your time and money without the potential for a big reward, thats great. Start a business, make it successful, and start pumping the brakes as you see fit. However, if you do this just be aware that competitors who are willing to scale may come and eat your lunch.



You can scale revenue without growing the number of employees. That's precisely why product-based businesses, like SaaS and software in general, are famous. Service-based businesses require scaling employees in order to scale revenue. In fact, if you keep employee growth in check, each employee makes even more money. Further, if you split profits, rather than forcing your employees to wait for the mythical IPO, they can use some of that money much earlier than if you grow employees, take on more investment, generate a huge overhang, give your employees low "startup" salaries, and then get aquahired with common equity getting zero return. In practice, it is far easier to get big payoffs for your employees if you keep the employee count small and aim for an early exit.




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: