Companies Shrinking as Information Technology Advances

Naval Ravikant: “The future will be almost all startups” “I firmly believe that the efficient size of a company is shrinking very rapidly, and so the future will be almost all startups.” In the clip below from a 2012 interview, Naval speculates that information technology will reverse the centralizing force of economies of scale following the Industrial Revolution. “I think the contract work trend is going to increase, and I think the size of your average company is going to decrease. I think we’re going to see more and more billion dollar businesses built by four or five people, and it’ll stay at that.” He doesn’t think we’ll see many more companies like Facebook or Google with tens of thousands of employees: “I think any entrepreneur worth their salt could today build Facebook with a few hundred people… Facebook and Google are in the situation that large companies end up in where the founders know that 80% of the people are not really needed, they just don’t know which 80%.”