Korva is a scroll of the internet’s best ideas.
The size problem
Size sets the bar for what counts. With gross bookings approaching 250 billion dollars, a new product has to show a path within a few years to multiple billions of dollars of transaction volume to be interesting. A new business also loses the fight for resourcing, attention, distribution, marketing dollars, engineering capacity, and management focus to the $225 billion business next to it.
Growth Bets
Uber's Growth Bets program gives new businesses dedicated capacity. Picture a mobility team of 2,000 people, with 100 to 150 of them working on the small stuff that has no product-market fit or unit economics figured out yet. Running a marketplace while giving a new idea 2% of your time does not work.
Money and focus
Dedicated teams also have to ask for money again. Inside a big company with a large balance sheet, new businesses get fat on resources, move slower, burn more cash, and hire more people than a startup would, so they end up chasing the companies building from first principles.
Why do big companies struggle to start new businesses?
Clayton Christensen of Harvard Business School argued that a company's resource allocation process favors large existing customers and proven margins over small new markets. Managers who are judged on the size of the main business tend to give its needs priority. A new idea starts with small revenue and loses those internal comparisons. Christensen published this argument in The Innovator's Dilemma in 1997.
How have companies protected small teams from the big business?
Lockheed formed Skunk Works in 1943 under engineer Kelly Johnson, with a small team kept apart from the main factory. The team set out to build a jet fighter. The prototype XP-80 was designed and built in 143 days and flew in January 1944.
Why do bigger teams tend to move slower?
Fred Brooks observed in his 1975 book The Mythical Man-Month that adding people to a software project can make it later. The number of communication paths among n people is n times n minus 1, divided by 2, so 10 people have 45 paths. Each added person needs time to coordinate with everyone else. Brooks drew on his experience managing the development of IBM's OS/360.
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