Tim McCune is an outstanding engineer. He is capable of taking a good idea in a field that he has never worked in and single-handedly convert it into a working product in little time. Tim works for Yahoo. He is also the founding engineer for an ab|inventio company in stealth that aims to forever eliminate waiting in line. His work is rapidly increasing the value of his company, and thus of his significant equity stake in it. I suspect his work for Yahoo is of high quality too, but his good work there gets diluted in a sea of other people, who, on the average, are not as good as he is, so Yahoo's stock value does not go up accordingly. To make matters worse for Tim, his equity stake in Yahoo is orders of magnitude less than that in the start-up, so even if it did, he'd take a minuscule share of the gain.

Tim is not alone. Marzia Polito has developed a search engine in five months that beats the work of small armies with millions invested. Yet much of the research work she did during the years she worked at a Fortune 50 company did not have any impact on a product.

Which leads to the question: why are there any effective people in big companies? Basically, if your peers are on average not as effective as you are, then your company is draining value from you rather than you gaining value from your company. There are two remedies for this. Ideally, you change companies to work with a more effective group of people. Or you start working for a smaller company where the dilution effect is not as severe and you can actually impact the bottom line in a significant way. This, together with the problem of the nine women working to make a baby and complacency, are some of the reasons that, all other things equal, innovation is more likely to come from small companies than big ones.

Smart people should work in start-ups.

Apply for a job at ab|inventio today!






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    Anonymous:There's also more to a job than just money. Large companies like Yahoo can offer a vast playground of resources, as well as a good education in what it takes to build and maintain web sites that can handle literally millions of visitors a day. This is something that is pretty much impossible to learn first-hand at a startup.
    Anonymous:To answer your question: "Why are there any effective people in big companies?" I think that it's so they can have more free time to focus on something that they're passionate about, without the immediate pressure of having to earn a living from it. I work with some very effective people, but most of them have passions outside the office (like music) that they prefer to focus on. Everyone's soul needs to be fed, and very few are fortunate enough to earn a good living while doing it.
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