TheRodinhoods

Size and Scale – Does employee size count matter?

Alok Rodinhood Kejriwal

I am clear about one simple concept.

Actually Crystal Clear about this.

That to massively scale Internet & Mobile oriented digital businesses, you do NOT need major head count (at least to begin with).

What you do need is:

i) A great, unique, inimitable, delightful, amazing CONTENT offering – if you are a content player.

Example – Miniclip.com (games)

ii) Very easy to use, simple, elegant, intuitive, no-brainer services – if you offer services.

Example – Dropbox.

iii) Massively productivity enhancing, never done before, problem solving, simple to implement yet impossible to do yourself services – if you offer enterprise solutions.

Example – Mailchimp, surveymonkey

Simply said, the real delight of your content or service should be such that consumers rush in and begin to flock what you have created – on their own, without a fuss, and then share their delight with friends and peers.

So, let’s not get confused. I’m not talking about ‘viral marketing’ here.

I mean that once you have established a successful offering, then you can decide how to scale it, and at your own terms.

Case 1:  FTV

Fashion TV began its operations as a 5-7 man team! They were so amazingly innovative in their concept of creating a ‘fashion model centric channel’, that all they needed were a few ‘uploaders’ to simply load readymade video footage that was supplied to them by fashion companies. All FTV did was rent a satellite and broadcast pre-supplied canned footage to global viewers!

FTV DID NOT invest in Cameramen or crew or trailers etc etc etc in the begginning. They scaled their business massively with a very small team.

Once they became successful, they expanded into events and parties and God knows what, but slowly and without creating massive head at the outset.

Case 2: Games2win

Games2win started when Dinesh Gopalakrishnan of c2w simply uploaded a couple of games that we owned like Bombay Taxi to the addictinggames.com site.

One thing led to another and soon we knew we had a successful model in creating ‘casual, snacky, web games’ for GLOBAL (Read – NOT INDIAN) audiences.

A year later, games2win was launched as a 3 man team.

A year after that, we were 7 people (I had become CEO, MK was CTO and Dinesh was content head etc) and we got funded by Clearstone. By then we had 50 games online and were drawing in approx 100-200k unique visitors a month in traffic to the site.

Till March 2011, we were 35 people. We had 500 games in the library, 5-6 million Uniques a month in traffic (as per comScore) and 1-2 million mobile game downloads.

Last year in March, Dinesh and I visited the addictinggames.com (AG) office in downtown San Francisco. AG was pulling in 15-20 million uniques a month to its site as traffic (comScore) and had a few million mobile game downloads. 

What shocked Dinesh and me was that the AG office only had 5-6 employees!!

How did AG do it?

AG did not believe in ‘making’ games. They believed that they were game ‘publishers’ and were happy to license games from developers all over the world, even at very expensive prices!

AG had cracked an amazing business model of selecting the BEST games in the world and SHOWING them to their audiences. They had done away with the bother of owning game studios, handling art and creative teams, worrying about testing etc etc.

Their slim team were the best GAMES EDITORIAL TEAM in the world, and they had built a world class business in moving the attention from making games to choosing games!

Take outs:

Scaling a digital business in this age and time comes from:

Once Zynga cracked the massive scalability of ‘social behavior’ in games, they then created ‘skins’ called Farmville, FronterVille, etc etc.

Zynga just colored and dressed up the SCALE that had been proven to exist.

Now, if you look at the problem of 1 trick ponies – like an advertising campaign, then you need lots of people all the time to make many 1 trick ponies and then to slaughter them after they have done their 1 trick

We don’t need to go beyond facebook.com to understand this point.

Check out this list (Jan 2011 data) – taken from this pingdom report

Automattic

Automattic is famous for being the company behind the open source blogging software WordPress (WordPress.org) and the hosted blogging service WordPress.com. WordPress blogs are split almost 50-50 between the two, with 16 million blogs hosted on WordPress.com, while 16.7 million are self-hosted WordPress.org installations.

Mozilla

Mozilla is the company/organization behind Firefox, which is one of those open source projects that truly benefits from its surrounding community. As much as 40% of the work on Firefox is done by volunteers.

Tumblr

Tumblr was one of the big successes of 2010, and the rapidly growing blogging service now hosts 12 million blogs. They’re on a hiring spree to catch up with their growing user base and the strains all that traffic has put on their infrastructure (they’ve had some wobbly times lately).

Twitter

Twitter has boosted its ranks significantly in the last couple of years to keep up with its explosive growth, but they still only have a staff of 300. Not that much considering the amount of users the service has.

Opera Software

Opera is only the fifth-most-popular web browser (after IE, Firefox, Chrome and Safari) on the desktop. However, the majority of Opera’s user base is due to Opera Mini, which is very common on mobile phones across the world. Opera is based in Norway, so we’re proud to call them neighbors (Pingdom is based in Sweden).

Wikimedia

Wikimedia Foundation is the organization that operates Wikipedia and several other similar wiki projects. Wikipedia’s content has famously been created by hundreds of thousands of people through the years. There are currently more than 100,000 volunteers who write and edit Wikipedia (and its much smaller sister projects).

Skype

Skype, letting you make voice calls (plus chat and video conferencing) over the Internet, has been around since 2003. Although it’s a bit like comparing apples and oranges, the numbers we have seen indicate that Skype is roughly as big as Facebook in terms of users.

Craigslist

Craigslist, offering free classified advertisements online, has been around since 1996 (it began life as a mailing list in 1995). In other words, it’s a real web veteran, and it’s probably quite a surprise to most to see that they have so few employees. And note that the number of users we mentioned here is just for the United States. Craigslist is also available in other countries.

Conclusion:

Understand that if you are setting up a garment factory that will need 1000 people per shift to create 1000 shirts a day, then HAVE TO START with hiring a 1000 people to begin with.

If your shirts begin to sell well, then you will need 3000 people to work 3 shifts and create 3000 shirts a day.

3000 shirts at $10 per shirt will earn you US$ 30,000 per day.

That’s the way business operates in the real world.

Now, if you and I start a FREE ‘dress up’ game on facebook, that lets young girls dress virtual avatars of themselves and strut around an imaginary world, then you need only the two of us to launch the business.

IF the game explodes and creates a massive viral tsunami for itself, then it’s POSSIBLE THAT:

1 million girls play the game every day, BUT ONLY 3% of them PAY everyday, and that too, just 1US$ for special  dresses.

Well, that will earn the 2 of us – US$ 30,000 per day!!

******

BIG BIG BIG THANKS TO ASHA for editing this post, which was in a really rotten state when I sent it to her!