Bill Watt’s Blog

I am fascinated by the problem of growth. When a company is successful, and I will define that as having business wins and a ton of work to do and not necessarily based on any kind of revenue number, the web way is to add more people. Well, I have no idea if that is actually right.

From what I’ve seen in my two start-ups the only reasonable way to handle hiring is to treat it like you do any other product / development initiative. You figure out some kind of NPV and if the numbers makes sense then you hire. Sure, in PM and PD you end up doing a bunch of things outside the process because minor changes / enhancements need to get done and not everything is worth an NPV but allow for those and just take my argument already, ok? 

But I wonder when in a company’s evolution that it shifts from NPV to personal desire, gut feel, or desire to build an empire. At FairMarket we had a rule that required the CEO to interview every candidate and he was the toughest to pass. It kept a bunch of bad folks out but it also slowed the process and in some cases we lost good candidates too.  But it is pretty easy to track the start of the bloat to when he stopped being able to interview everyone. As a friend of mine in an SF company says, “A hires A, then A hires B, then B hires C” which I’ve always taken to mean that the further you get away from the original or core folks then the more likely you are to get lower talent. That’s when you start to hear, “A body in the chair is better than nothing.”

So, I’m reading this CNET articleabout Google having doubled in size in the last 12 months and the associated problems the new employees are having in figuring out the place and it doesn’t seem that surprising. Still, I think this is a first world problem that Google is facing and that they’re continuing to focus on hiring the best and the brightest folks and that they’ll probably figure it out. Hell, I’d actually like to work on the team tasked with solving that problem! I can imagine a couple systems or tools that the engineering heavy and cash rich company could crank out and use to on-board the new folks. Maybe a new gphone with a 411 number right to a process support team?

But for young companies without the benefits of a Google I think the problem is more challenging even if the numbers are smaller. When do you ramp in advance of revenue? When do you ask people to do more and not grow teams? How do you focus instead of falling into the land grab game where growth is key and revenue / sustainability is secondary?

I am impressed when I hear that Facebook has hired a ton of people and then find out they have grown to a whopping 300 people! 300 isn’t so bad. But I do feel for the original folks there. 300 is about 100 to 150 past where you can know everyone pretty well. They’ll be hearing about social clubs, have lunch time debates about maintaining the culture, discussions about people who are joining just fo the stock and yetr don’t know that CTRL-ALT-DEL is the key combination required to unlock your computer in the morning, and probably have some new hires asking about work life balance. Growth is sexy and growth is cool but even when you’re the darling of the internet age, loving all the press, and thinking about changing the world something is lost when you move past code releases that involve everyone in the company staying up all night together and working on a common goal.

Good luck to big and small alike.

So, I think everyone who knows me would agree I’m a Cornucopian and that I believe we have the means to fix our current problems. As such I find it amazing that we haven’t yet fixed this oil dependence and reliance on other parts of the world for our standard of living.

Then I read articles like in this month’s Fast Company article featuring a story on Johnathan Goodwin, a co-partner of SAE Energy, who converts some of the biggest gas-guzzlers in America into some of the cleanest and most efficient cars on the road. It ain’t cheap but if he can do what he says then I have to imagine Detroit could find ways to make it market ready. We all won’t be pulling up to restaurants and asking for fry oil if they just worked with the valley and the government and got the ball moving on real solutions instead of arguing against competition from European diesel imports.

I really think you should read this article as written so I won’t pull out all the interesting sound bites but here is one section I found really interesting (since I tend to think about the execution issues involved):

“Goodwin admits all these things are true but believes the country could be weaned off gasoline in a three-step process. The first would be for Detroit to aggressively roll out diesel engines, much as Europe has already begun to do (some 50% of all European cars run diesel). In a single stroke, that would improve the nation’s mileage by as much as 40%, and, because diesel fuel is already widely available, drivers could take that step with a minimum of disruption. What’s more, given that many diesel engines can also run homegrown biodiesel, a mass conversion to diesel would help kick-start that market. (This could have geopolitical implications as well as environmental and economic ones: The Department of Transportation estimated in 2004 that if we converted merely one-third of America’s passenger cars and light trucks to diesel, we’d reduce our oil consumption by up to 1.4 million barrels of oil per day–precisely the amount we import from Saudi Arabia.)

The second step in Goodwin’s scheme would be to produce diesel-electric hybrid cars. This would double the mileage on even the biggest dieselvehicles. The third phase would be to produce electric hybrids that run in “dual fuel” mode, burning biodiesel along with hydrogen, ethanol, natural gas, or propane. This is the concept Goodwin is proving out in his turbine-enhanced H3 Hummer and in Neil Young’s Lincoln: “At that point, your mileage just goes really, really high, and your emissions are incredibly low,” he says. Since those vehicles can run on regular diesel or biodiesel–and without any alternative fuel at all, if need be–drivers wouldn’t have to worry about getting stranded on the interstate. At the same time, as more and more dual-fuel cars hit the road, they would goose demand for genuinely national ethanol, hydrogen, and biodiesel grids.”

See, this is the part that makes me crazy. Everyone is worried about the rest of the world taking our jobs. I’m from Ohio and I hear the stories about steel mills closing and the work going over seas. (I read an article last week about how international companies are growing and are expanding by buying our closed steel mills and running them more efficiently. Hmmm. Seems like there is another blog post there.)

We are a country known for our innovations and if we got off our asses, built some new technology that removed our dependence on foreign oil, especially from the Middle East where our dollars are arguably supporting folks who don’t have our best interests at heart, and if we used the new technology to create a leap forward that created a new industry then we’d be in the lead once again. I’m not even sure that it is debatable anymore that we’re in an innovation economy and trying to be protectionistic is the wrong approach.

Manufacturing can always be done by cheaper locations (funny to see China is now pricing itself out of the manual labor work as other countries seek to take the business and get China’s year over year growth rates) but you can’t really outsource innovation. In my mind our options are to be on the cutting edge or be competing with the low cost factory providers. I’d rather be in the former and create the markets that others then adopt.

Read the full article and let me know what you think.