Transcript excerpt of a conversation between Naval Ravikant and an interlocutor about company size, innovation, and the influence of venture capital. Naval argues for keeping teams small (ideally 15–20 people) to preserve innovation and culture, preferring community-driven scaling and selective partnerships over growing into a large, bureaucratic company that must “tax the environment” to satisfy large business models. The speakers label excessive VC funding as “the curse of venture capital.”
Chapters
You got a serious company on your hands.
Oh yeah. We work day and night 24, seven.
And you got 12 people. And this can only go in one direction. This can only go to a 50 person company, 100 person company.
I want to keep it small.
You can't keep this small. The world needs it. And that's like saying you're going to try to keep Kickstarter or Facebook small or Twitter small. It's not your choice.
I think you can get a lot of leverage to code and community. If we have to add people, we will. But I think large companies don't innovate, large groups don't innovate.
So you're scared of that. That's your big fear, is we stop innovating. Is that the biggest fear?
Well, two problems. One is large companies don't innovate. Two, they're not fun to work at.
Right. So you've got to try to figure out how to keep this company.
I'm a lousy manager.
You gotta keep it under 30 people.
I'm trying to keep it at 15, 20 even. That's a stretch.
It becomes less fun, doesn't it, as an entrepreneur?
Less fun. Too much coordination cost, hard to move. I think that's where we'll try and do a few good select partnerships or just hand things over to the community.
I think it's smart. It's almost like a Wikipedia style. Like we don't have to be involved in every single thing. We don't have to extract every ounce of value.
Yeah. And in fact, every ounce we extract, we give away. So one of the problems with creating a large company is it force you to find a large business model, which means you got to tax the environment more, which means your quality goes down. The leaner and smaller we are, the less money we have to make, the less irrational stuff we do that might hurt the community.
Wow. It's a completely different way of thinking about the business. Don't become a slave to the burn, so you don't compromise the integrity of the product.
That's right.
And that's a very delicate balance. And Certainly if you're 10 people, there's no chance of that happening. You can easily just monetize. It's almost like Reddit Diggs community suffered because they needed monetization so badly to appease the VCs and Reddit's didn't.
It is the curse of venture capital.
The curse of venture capital.
Extra money will not change my life. So it's more important for me that Angellist be impactful be a part of the ecosystem. Makes it simpler, more efficient, more transparent.
So for you naval, it's about being the change agent. Having the best product that provides the most value. That's what you're addicted to.
