

Ask HN: How large can a web dev agency get? Is it a good business model? - biznerd

Most web dev agencies seem to be under 20 employees. Is that the limit of the business model? Arguably, this is basically a small business.<p>Exceptions could be companies like 37signals, which develop their own proprietary products. Successful ones seem to be rare.<p>It seems many dev shops are going this route. So if you have the capital, wouldn&#x27;t it be smarter to start with product development?
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kevan
Lecture 20 of How to Start a Startup[1] touched on this.

> In the beginning of a company, there is no management. This actually works
> really well. Before 20 and 25 employees, most companies are structured with
> everyone reporting to founder. It's totally flat. That's really good. That's
> what you want because at that stage, it's the optimal structure for
> productivity.

> What tricks people is when lack of structure fails, it fails all at once.
> What works totally fine at 20 employees is disastrous at 30.

This is pure speculation, but I can imagine that this limits the size of many
companies. Most web dev agencies I'm aware of weren't founded as hyper-growth
startups that are willing to push through that barrier.

[1]
[http://startupclass.samaltman.com/courses/lec20/](http://startupclass.samaltman.com/courses/lec20/)

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mtmail
Pixelpark Germany
([http://www.publicis.com/capabilities/](http://www.publicis.com/capabilities/))
started 1991 and scaled to 500 full-time employees around 2009. Currently
claims 800 (not sure how many full-time). They even IPO-ed. No product on
their own, it's still doing web-solutions for customers only. It just covers
full brand management, research, SEO/SEM etc as well now.

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danielsju6
You see under 20/30 employees in a lot of businesses; the reason (IMHO) is
that this is a natural choke point. Any more than 20 employees and the
principle has to delegate, hire HR, management, and develop processes—it's a
natural point at which a single leader cannot scale and a business has to
transition into "a company".

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baristaGeek
If you're located in a developing country clients will literally "rain" to
you. It's a good business because the ROI is really high, but it's more of a
"red ocean". In the short term it can work, but if you really want to start a
business, shouldn't you be thinking in the long term?

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biznerd
Can't it be long term if you get to 500+ employees like some of the firms
mentioned in this thread?

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gexla
The Nerdery is quite big.

[http://nerdery.com/](http://nerdery.com/)

According to their site, their headcount is 528 developers and 52 dogs.

