
Running a Billion Dollar Startup with Twelve People? - barredo
http://birch.co/post/8094104041/running-a-billion-dollar-startup-with-twelve-people
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erichocean
While I don't think that 12 (or 30, or 100) is worth shooting for
specifically, there is a sense that "billion dollar startups" aren't going to
happen if they require resources that cannot be effectively provisioned and
scaled.

People are _exactly_ that kind of resource, and thus hiring should be on the
radar as one of the things you optimize when designing your business model.

One of the main reasons my current startup sells exclusively through VARs is
because there's _no way_ we could possibly scale out our support organization
as fast as our SaaS product can be adopted by companies, and the product is
such that companies will need support.

By going through VARs, we solve that problem by first training the VARs to
support the product, and then selling to their customers (the VAR getting the
support contract).

It's way more effective in terms of time, and scales a lot better than the
alternative: hiring and training our own support organization, which is
ridiculously people-intensive.

Without that strategy, our company could only scale out with VC money and a
"hiring binge", as the author put it, if at all. By taking the time to see
where those scaling challenges would be now, we're able to hack around it and
position ourself for growth without needing capital to do so.

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lutusp
> Running a Billion Dollar Startup with Twelve People?

A "billion-dollar startup" is a contradiction in terms, like a "newborn self-
made millionaire". It's a classic of overhyping and wishful thinking.
Especially in view of the fact that the majority of startups fail.

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yo-mf
What exactly is the contradiction? The only contradiction I see is in your
comment. Which is it; an oxymoron or a gross exaggeration?

Very few startups ever achieve the billion dollar threshold. They are acquired
or plateau or fail or become a middling public company. In fact, very few
businesses across any industry ever reach this milestone. So setting the bar
for a startup at a billion dollars is still a fairly audacious goal and sets
up the premise of the article which is creating a massively successful company
with a minimal number of employees.

~~~
lutusp
> What exactly is the contradiction?

The contradiction lies between the terms "billionaire" and "startup". Startups
are not billion-dollar enterprises, and billion-dollar enterprises are no
longer startups. They're mutually exclusive.

> Very few startups ever achieve the billion dollar threshold.

Yes, and if they do, they're no longer startups -- it takes too long.

> So setting the bar for a startup ...

That is a different thing entirely. Setting a goal of becoming a billion-
dollar company at some point in the future, doesn't justify describing the
company as a "billion-dollar startup." It would be like calling a baby an
"Olympic-class infant," based solely on expectations for the future.

> and sets up the premise of the article ...

The premise of the article is to conflate two mutually contradictory states --
startup, and billion-dollar enterprise.

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mooism2
The first two bullet points are basically the same one, and not a panacea.
Outsourcing still requires management. These people aren't your employees, but
they're still working for you. You've essentially outsourced the HR
administration along with the design work / translation work / usability
testing / whatever. You're still paying for it.

A lower employee headcount is a means to an end, not an end in itself. It
would be nice if the article could clarify what the net advantages are, rather
than the gross advantages.

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yo-mf
Outsourcing is still significantly cheaper and less resource intense,
particularly when it comes to more automated processes such as HR. However I
see your point.

Your second point however makes little sense. The article posits whether this
is possible, not setting this up as a goal or recommendation for startups to
pursue. As more things become automated or rolled into services, companies
have less need for large workforces, which is a trend that has been seen over
the past several decades in a number of industries. This is part of the reason
for the boom in startups recently. Much of the groundwork such as
infrastructure and frameworks have been covered by existing services that
previously needed to be created from scratch by previous generations of
startups.

