Admirable startups

It’s common advice to have a list of heroes who you admire and can emulate. This is my equivalent and ever-changing list of businesseses, and the reasons why I admire them.

Whatsapp

Whatsapp was acquired for around 21 billion dollars, and at the time had 55 engineers. For anyone that’s run a startup, an extremely common vanity metric is team size. The second or third question in every startup-meetup-conversation is “how many people in your team?”, followed by a vague figure that’s inflated by 20%.

The truth is that it’s extremely difficult to convert more people into more value for the company. It usually slows down communication, slows down development, and it definitely hurts the bottom line.

Whatsapp probably had the highest dollar-per-employee acquisition in history. They didn’t get stuck in the “hire fast, fire fast” fad (which usually is “hire fast, never fire” anyway). If you’re running a startup, make this one of your key metrics: revenue per employee.

Amazon

People complain a lot about how Amazon treats their staff and they are justified in doing so (as far as the stories are true). But beyond that Amazon do a lot of things right. Primarily they focus on growth. They don’t give a shit about how things look and how they function. They just care that they do function enough to make them keep growing.

This is most apparent in their lack of dividend payouts (in the early days). If your company is making money, and you’re giving it away (either to owners, employees, or other companies), you’re essentially slowing growth. Compound interest is only compounding if you re-invest the returns.