Virtuous cycle

Bartlomiej Owczarek weblog

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Dunbar’s barrier

We know quite a couple of companies which are growing quite fast, and often we end up talking about difficulties in scaling up.

One particular scaling milestone that we discuss is at about 150 employees.

Looking back, many firms at that point made major decisions on what to do next, often selling themselves to larger corporates (eg., which is one way out of scaling problem, since corporation has all the necessary processes already in place.

Number around 150 is often described as a maximum number of social interactions that person can comfortably handle. Above that number employees cease to know others in the organisation and personal relations have to be unfortunately replaced with more formal processes and procedures.

The number is brought up in Gladwell’s “Tipping point”. It was defined (actually it’s an approximation of a range from 100 to 230) by Dunbar in 1992.

Gladwell quotes one firm (Gore Associates) which for this reason splits itself whenever it approaches 150 employees.

Thinking of Goldenberry, which now has around 15 team members and fast approaching 20, we are about 3 years away from the barrier, assuming annual growth rate of about 100%.