How to Kill a Unicorn

A startup which wants to become a unicorn must grow.

To grow, it needs to hire.

To manage new hires, the company promotes or hires managers. As the org chart grows wide, it also grows deep, leading to a rising population of middle-managers, usually referred to as “directors”, “executives”, or “VPs”. Middle-managers are charged with deciding which projects to invest in and which to kill.

The number of projects is linear on the number of employees. The number of employees is exponential on the level of the middle-manager, since org charts are somewhat balanced N-ary trees.

Therefore, the number of projects a middle-manager is responsible for is exponential on the level of the middle-manager.

The amount of time a middle-manager can devote to understanding each project they are responsible for decreases exponentially as the level of the middle-manager increases.

As a middle-manager’s attention for each project decreases, they make less informed decisions, ultimately leading to a worse product. This is why bigger companies produce worse products. This is how to kill a unicorn.

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Note: a naive way of solving this is delegating decision-making further down the tree, closer to leaf nodes. However, middle-managers act as tie-breakers when there is a conflict amongst their descendants. The number of tie-breakers is linear on the number of projects which is still exponential on the level of the middle-manager.