Individuals Matter
The one strategy that the article doesn&#x27;t cover, but which I see often, is where the top leadership says &quot;We need to keep headcount down, but we need to get more software development done, so how can we do it without any extra people? Oh, I know, we will outsource this to an outside agency.&quot;<p>And yet, the outside agency costs more than actually adding to the headcount, so it is not cost effective. However, it is seen as temporary, so it this strategy is favored. There is the odd fear that headcount is permanent -- a fear that is mildly true in Europe, but definitely not true, at all, in the USA. Yet in the USA I still see managers who are eager to outsource.<p>The outsourcing tends to become permanent. The idea that it is somehow less permanent than headcount is a pure fiction.<p>But to the main topic, I appreciate this essay for emphasizing that &quot;People are not fungible.&quot; I&#x27;ve tried to emphasize this in my own writing. I think, in general, writing about startups would be healthier and more realistic if we had more case studies that emphasized the role of specific individuals, for good or for bad.<p>In my own book, How To Destroy A Tech Startup, I tried to emphasize this:<p>-----------------------------<p>Emotions matter. We might hope that those in leadership positions possess strength and resilience, but vanity and fragile egos have sabotaged many of the businesses that I&#x27;ve worked with. Defeat is always a possibility, and not everyone finds healthy ways to deal with the stress.<p>More than once, I’ve seen startups self-destruct.<p>I&#x27;m making a point about the importance of the individual in a small startup. In a large company, an eccentric individual does not do much damage. Even when such a person is in a leadership position, the company will have a bureaucracy that can ensure some stability. But when a company consists of two, or only a few people, and one of them reacts neurotically to challenges, that company is doomed.<p>I’ll relate one of my previous experiences to illustrate this point. From 2002 to 2008 I spent most of my time working with an entrepreneur who  had inherited a few million dollars when he was 25. He managed to burn through much of his legacy in just the time we were colleagues. He admired musicians and considered the music industry glamorous, so he built a sound studio. It never made money. The bands that stopped by were broke. Those few who came up with a hit song mostly signed with a major label which, typically, had its own recording studio.<p>I met him in 2002 when his focus was shifting to the Web. I had developed some software that allowed people to create weblogs. Typepad.com, which offered something similar to what I&#x27;d built, had just raised $23 million in funding. Surely we could do the same?<p>Working with him was difficult. We might go like maniacs on some project for four months, and when we were on the brink of unveiling it to the public, he would grow bored with it, and move on to something else. The first time this happened, and I asked him his reasons, he improvised some arguments that sounded plausible. Perhaps he suggested there were already too many startups doing the same thing. But this pattern, where he walked away from a project just when we were ready to introduce it to the public, repeated itself. What led to this self-sabotage? As I met his whole family over the years I got to see the sad dynamics that ate at him. He had a desperate need to impress his father. A modest business success would not be enough, in fact, it would leave him embarrassed. Only the creation of something as big as Google would impress his father. But to grow that big, we would first need to be small, and that was the step he had no patience for.<p><pre><code>                                                                                                            As the years went by, and he burned away all the money he&#x27;d inherited, the stress wrecked him. His self-image became increasingly grandiose. He told people that he was a visionary, someone who was able to tell what the future would look like. Late at night he would smoke marijuana and read articles on Slashdot and TechCrunch and then put together an amalgam of words that seemed full of the bright hopes of humanity, which he offered up as our marketing: &quot;The Universe is fundamentally electromagnetic yet non-sentient, and we are sentient but only partly electromagnetic; the Internet is the ultimate harnessing of sentience to the fundamental forces of the Universe. Therefore our software will put you, our customer, in the driver&#x27;s seat of real-time conscious human evolution.&quot; Later, when he wrote up our business plan, he put these two sentences in the Executive Summary. I’m not joking.
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He had no ability for internal dialogue. Only by talking to others could he hear his own thoughts. At our peak in 2007, we had eight people on our team. Sometimes I would look around the room, when he was talking at everyone, and I would think, “If you add up what we pay all these people, we are spending $300 an hour so that he can have an audience.” When he felt fear about our chances of success, he would need to talk to everyone, and when he was euphoric about our chances of success, he would need to talk to everyone. Therapy would have been cheaper.<p><a href="https:&#x2F;&#x2F;www.amazon.com&#x2F;Destroy-Tech-Startup-Easy-Steps&#x2F;dp&#x2F;0998997617&#x2F;ref=as_sl_pc_tf_til?tag=smashcompany-20&amp;linkCode=w00&amp;linkId=2292ad04b2b6e409785d2e4cdd570c70&amp;creativeASIN=0998997617" rel="nofollow">https:&#x2F;&#x2F;www.amazon.com&#x2F;Destroy-Tech-Startup-Easy-Steps&#x2F;dp&#x2F;09...</a>