Staying small / Virginia Beach, VA

Google, Yahoo, Microsoft, et. al.: We deal with these companies and their applications and services everyday. But why? Do they create the most value for people? Is the value being created at the level of big or small?

But they are locked into their system, playing the traditional consolidation and scale game here.

Is it a matter of creating better options to liquidity? Is just a matter of better post-merger or post-acquisition integration? A little differently, is it even possible for a company to grow organically without sacrificing its focus on core competencies?

At the end of the day companies, and the people that create and work in them, want to get paid. That’s our incentive structure. Whether we admit it or not, our actions follow the incentives we face. And until that changes, until we provide a way for people to get paid while staying small, we will work to grow.

Perhaps a better exit option could provide a better incentive structure?

Create a way for people to get paid by staying small, and they will (get paid, and stay small).

And the ones that don’t stay small, and grow their company into many business areas with phalanxes of people? Good luck. If the fundamental basis for the size of firm is built on finding the optimal efficiency of interaction costs, the advantages of scale and ownership of resources (e.g. capital, labor) may be declining. The push could be to figure out how to get smaller, not larger.