Creating Wealth

Steve Jobs once said that the success or failure of a startup depends on the first ten employees. I agree. If anything, it's more like the first five. Being small is not, in itself, what makes startups kick butt, but rather that small groups can be select. You don't want small in the sense of a village, but small in the sense of an all-star team.

The larger a group, the closer its average member will be to the average for the population as a whole. So all other things being equal, a very able person in a big company is probably getting a bad deal, because his performance is dragged down by the overall lower performance of the others. Of course, all other things often are not equal: the able person may not care about money, or may prefer the stability of a large company. But a very able person who does care about money will ordinarily do better to go off and work with a small group of peers.

This is like a Christmas present from Paul Graham.

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