Company Sizes

A discussion, this week, about the sizes and lifecycles of companies. With someone who had a vested interest in the subject (being the MD of a growing small company), but believed that all large companies were essentially doomed to die.

An interesting discussion though- starting as it did with something that looked suspiciously like the Gartner hype cycle, with small companies growing rapidly at the start of the graph, and larger ones down the back of the curve, desperately trying to recapture the spirit and entrepreneurship that drove them when they were smaller. He also cited Racal as the only British example of a large company that got it right.

But wait – trying to capture the spirit yadda sounds suspiciously similar to what innovations managers are trying to do. Creating subcompanies, building fast-response groups, developing rapidly into new markets – all things you’d expect to see in a set of startups. And all needing a similar set of skills. Which I’ve known for a while, but I’vI haven’t yet thought hard about what the real differences between these two situations are. So.

Small Big
Funding – from investors – risk in early years of outgrowing cash supply Funding – from PV or customer programs. Risk of outgrowing budgetholders goodwill (“funding valley of death”)
Resources – whatever you can acquire, plus anything provided by small business schemes. Usually enthusiastic, usually skilled, unlikely to cover very wide range Resources – whatever you have, plus whatever you can buy in. Variable levels of enthusiasm and experience, range might be wide, but might not if the company has overspecialised
Politics – external, often benign, sometimes positive; company is often image-sensitive Politics – external plus internal, rarely benign