Posted on Wednesday, 12 February 2014 in Business

Why size matters

“Bigger doesn't necessarily mean better in the business world”.  This is an opinion, which has been tossed around quite a bit lately, but does it really hold any true significance? Andrey Grehov believes it does, and in his article, “Stay Small to be Big”, recently published on the Huffington Post, he explains exactly why. 

 

Using the analogy of renting a small apartment rather than a large one, Grehov explains that the expense and time required to run large businesses are significantly more. The energy required to sustain a big business is considerable. What's more, in a constantly changing business environment, flexibility is a significant advantage for smaller businesses. 

 

Looking at some of the most dynamic and successful companies in the business world like Instagram and SnapChat, we can see just how effective a smaller team can be. Not only does it mean that your business model is easier to change, but also that you are able to adapt to external and internal changes far more quickly. Less communication is required to spread important messages and information. 

 

While Grehov argues that cutting back on teams will help you to reap rewards, this broad statement may be somewhat shortsighted. Surely we can all agree that large businesses have their place in the business world as well, and that massive corporates enjoy benefits that smaller companies don't. Naturally you don't want your company rendered ineffective by unnecessary size, but this will all depend on the business’s' identity. What do you want to achieve and whom do you need to be in order to get there?

 

What are your views on the issue of size in the business world? We'd love to hear them. 

 

The original article can be found here.

 

Stay Small to be Big – Original Article

 

My NY apartment is pretty small. Nevertheless, there are a lot of benefits I can be proud of comparing to apartments with bigger space. Here are a few ones that come to my mind:

•Less space -- the rent is lower

•Lower rent -- can consider better neighborhood

•Less stuff -- easier to move

•It takes 30 minutes to clean up the whole apartment

•Forces me to create fabulous and compact design

 

I'm sure more benefits can be added to the list. Now let's imagine that instead of a small studio I have two bedrooms in Manhattan. First of all, the price will be tripled. Yes, tripled! You may say, price is no issue but think about all the cleaning. Do you really want to spend two more hours of your time to clean two more rooms, which may never be used by anyone at all? Time is money.

 

Similar statements can be said of the business world. The bigger you are the more energy required to stay stable. It's like cleaning an apartment -- the bigger it is, the more energy required. The business world changes fast. And you have to keep up with it unless you decide to retire. Staying small gives you that flexibility that millions of companies are trying to achieve. Do you remember "less stuff -- easier to move"? This is agility. Staying small is like having a small car and being able to park it at places where others only dream of. Like having more neighborhood options when requiring less office space. If your company does not have that level of flexibility, believe me, you'll always be two steps behind. Forget about latest technologies. Forget about conceptual management practices. Forget about passion. You are too big to adapt. I would like to quote Jeff Bezos, founder and CEO of Amazon.com: "If you can't feed a team with two pizzas, it's too large". I agree, do you? Instagram had 13 developers when Facebook bought them for $1 billion. SnapChat, photo messaging application and $4 billion company has 20 employees. What is the root of their success? Well, one of the most noticeable reasons is the size. Having such a small team gives them the advantage over those enterprise giants.

 

•Easier to change business-model

•Changing priorities takes much less time

•Internal and external changes are adopted easier and faster

•Less meetings required to spread knowledges/updates

 

Stay small to be flexible enough. If you are looking for what could be optimized in your company, then reduce, see how it goes and then reduce again until things get better. By saying reduce, I mean either cut people or split the teams as much as possible. It can be hard. It can take some time. It can also be tough. But in the end you will be happy you did it and reap great rewards.

 

- Andrey Grehov

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