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Why starting poor helped

Bending Spoons began with very little money, and nobody offered it $100 million. Having less forced the founders to be resourceful and frugal, and those habits are easier to build into a company's DNA when it starts poor. More capital would have allowed some things to happen bigger or sooner. The advantages that matter most took 13 years to build.

Capabilities grow in steps

Technology shows why. Nobody can look up which proprietary systems to build or what they should look like. That knowledge accumulates in tiny increments while acquiring companies, transforming them, and running them over and over, failing along the way and finding that what works looks different from the plan.

A strong employer brand grows the same way. A few of the best students from one university join, tell their former classmates it is amazing, and two becomes four and four becomes eight, until thousands apply. Culture follows that sequence too. Hiring 500 or 1,000 people overnight and expecting common purpose and a uniform playbook is a recipe for disaster.

The pull of quick results

Outside investors could also have pushed for faster or different results. Showing 10% more revenue this year is one goal. Building a better employer brand, or learning to predict how inexperienced hires will perform, is another, and it appeals less to anyone watching for a quick return.

Why does fast hiring weaken culture?

The anthropologist Robin Dunbar proposed in the 1990s that humans can keep only about 150 stable relationships, based on a link between primate brain size and group size. Past that size, norms stop spreading through personal contact and written rules have to take their place. W. L. Gore and Associates is often cited for limiting its plants to around 150 people for this reason.

Why can't research replace learning by doing?

In 1936, the aeronautical engineer Theodore Wright reported that the labor needed to build an airplane fell by a fixed percentage each time cumulative production doubled. In the 1960s, the Boston Consulting Group described the same pattern across many industries and called it the experience curve. The gains came from the many small changes workers found while doing the work, not from any manual written beforehand.

How does an employer brand snowball?

Hiring spreads through personal networks more than through ads. Mark Granovetter's 1974 study of professionals near Boston found that more than half had found their jobs through personal contacts. Each new hire who admires the place becomes a contact for friends and former classmates, so the pool of informed applicants grows with every cohort.

More from Joys of Compounding

Work & LeadershipCaring is contagiousWhen almost everyone on a team cares about the work, the people in the middle start to care too. When almost no one does, the middle stops caring.
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