Organizations and Scalability
A firm will tend to expand until the costs of organizing an extra transaction within the firm become equal to the costs of carrying out the same transaction by means of an exchange on the open market or the costs of organizing in another firm.
What we’re talking about today is not marginal fluctuations in transaction costs but almost a complete collapse. That’s why a terrorist group that has made almost no effort to organize can function at least comparably to the most powerful army in the world. Or blog can sell more books a month than a medium sized bookstore as a secondary revenue stream.
I can’t really tell you what it is that I do because I don’t have job descriptions. I’m not even formally employed by two of the people I work for – if I was it would create more problems that it would solve. Which is why the idea of hustling is so important. You have to be able to function independently or you’re not worth anything. So the whole notion of scalability is being turned on its head because what you do might not need to be scaled – you might be enough.
But that takes time, effort and constant experimentation.
Other reading:
The Rule of Five – John Robb (blog post)
Dreaming 5th Generation Warfare (blog)
RMMB: John Boyd 2.0 (discussion)
Here Comes Everybody: The Power of Organizing Without Organizations – Clay Shirky
The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations – Ori Brafman
Charlie Wilson’s War: How the Wildest Man in Congress and a Rogue CIA Agent Changed the History of Our Times – George Crile
The Cathedral and the Bazaar: Musings on Linux and Open Source – Eric S Raymond
Hey there,
Your bit on job description and functioning independently reminded me of an article in GQ about a true “hustler” in the NBA. It’s a great account.
IS THIS THE MOST POWERFUL MAN IN SPORTS?
In the NBA, all roads lead to one man, whom you’ve probably never heard of: William Wesley–a.k.a. Worldwide Wes–the most connected, most discreet, most influential man on and off the court
http://men.style.com/gq/features/full?id=content_5735
Except for dealing with interruptions and managing egos, one bright person can do the work of many normal people without effort…and there’s no need to scale anything up. You can’t duplicate a creative spark.
I love your blog, but it really needs a ‘forwards’ and ‘back’ button so that you can go chronologically through the posts without having to go back to the ‘archive’ page each time.
I’ve read that article before. I’ll read it again but here is the problem (as I remember it)
WHAT DOES WILLIAM WESLEY DO?
What are his actual skills? As far as I can see, he just knows people and knows how to be a friend. THAT is not a business. That’s how you wake up one day and are utterly irrelevant. He might be riding around in private jets and driving a nice car but that is not his money. In my opinion, William Wesley is like the 1970’s Robert Evans. How did that work out? One bad news story and he didn’t work for a fucking decade.
I am not saying that you should be like him. I am saying the opposite.
Ryan, here’s what I don’t understand about your contempt for Wesley. He might not create anything, but he still adds tremendous value because he’s a networker. In The Tipping Point, one of the types of people Malcolm Gladwell discusses is the connector, and Gladwell goes on to explain the tremendous value created by these types of people. Well, isn’t Wesley a classic connector? He’s one of those guys who knows everybody and can connect anybody to anybody in the world of basketball.
I can totally understand how someone, such as an artist, wouldn’t want to be a connector because, like you say, you don’t actually create anything. But I guess what I don’t understand is why you hold people like that in such contempt. The only reason I can think of is that the type of work Wesley does describes the work done by most people in mainstream Hollywood, and it certainly appears from your blog that you hate that world.
No question it would be fun to be Wes. He rides around on other people’s expense accounts, gets access through other people’s names, can get just about anyone in the world on the phone.
But don’t confuse that with CREATING value. Wes’ gig is the exact opposite. By definition he is trading off of it – Michael Jordan to get LeBron, LeBron to get next year’s hot shot. It’s called arbitrage. He is taking value that other people don’t have to time or resources to work with (but could were the situation more efficient).
There are literally thousands of people like Wes out there. He’s just the luckiest. And tomorrow that could change. Not only that, I guarantee we could open Wes’ bank accounts right now and it wouldn’t be much more impressive than most decent professionals his age.
Phil Knight on the other hand built a business. Something that is REAL. He has skills and a product that no one can ever take away.
Networking is awesome. It should just never be a primary strategy. It can get disrupted in a second.
Tom Hanks and Julia Roberts are a classic combination… Charlie Wilson’s War made me feel better about U.S. foreign intervention, it seemed to work out, though that time our intervention was in response to another country’s invasion
Agreed that Wes is an arbitrageur. But given that no one is as good at it, or has been as lucky, he’s important.
From your mouth…
“So how do you figure out how important you are? Take the average importance of the names in your email inbox and phone log, shave a little off and that’s your answer.”
And in my head, importance = value.
Unfortunately for Wes, (though I’m not sure if he wants more) he hasn’t used it to build anything tangible.
happy wednesday x
I believe that William Wesley’s importance to the basketball is a sign that something is fundamentally fucked up. However, from what I can piece together, Wesley seemed instrumental in the creation of the “pipeline” that hooks very good high school basketball players up to shoe companies (Nike), a small number of elite college b-ball programs (Memphis) and high-powered agents (Rose).
He’s a non-professional scout with the ability to build multiple relationshpis without pissing anyone off, can name-drop on a massive scale and exploits the in-betweens that the flawed system leaves open. I see him as a precursor to Ryan, who can work the spaces, but create actual content and build tangible things.
Gladwell’s networkers theory has been pretty much proven to be half or all wrong. I forget where I saw the article, but Ryan and Tucker would know.
Did you read the article? Did you see the part where he went through his phone and called up famous people? That’s honestly one of the lamest things I’ve heard of anyone doing ever.
You know what real businessmen do when they try to sign clients? They show them how they will make them money. Or how they will solve a problem.
Importance = Importance. That’s it. You’re in for a shitty life if you think otherwise.
Yah it sounded terribly lame in the article. It was awkward to read, but thats not what matters. Did it get the job done?
Real businessmen blah blah. We all know what real businessmen can and should do. The point is Wes solved a problem for Barbosa. He was pitching to a 20 year old from Brazil that had never talked to his fav ball player or his fav musician. He now has. When Lebron, the golden egg for the nba, was on the market, it didn’t matter if what Wes did was real or not. He got him.
Wes creates value through his relationships, his rolodex. It’s his playing card and he plays it better than anyone else in his position. Wes’ “problem” is he hasn’t done anything tangible with it. When he dies, his rolodex won’t leave a mark.
Also, my life is awesome
I look at Kobe Bryant as a hustler. He is not a product of the culture that produced most black NBA players. He lived in Italy and went to private schools. He was different, and it was always obvious. A few years ago he got tattoos. Then he raped a girl, or at least cheated on his absurdly hot wife Vanessa. It was a pretty clear identity crisis. But he remade himself. Notice how he interacts with teammates now-he talks to them on their clowny level, but it’s all clearly calculated.
Watch him jump over the Aston Martin:
http://www.youtube.com/watch?v=yURa9T0-Rjk
“I got this. I got this. I will be there. You trust your boy? (hits Turiaf) You trust your boy?!”
All that is calculation. But he’s enthusiastic, he SELLS it, he has energy, confidence, and his followers know, beneath everything, how intense, dedicated, talented and possibly insane he is. To me, a hustler is someone who reinvents himself in a very deep way but reveals nothing of the anguish that comes with it. The more he’s suffered, the more he has to act (and more than just act, really BELIEVE) like he’s never suffered. That’s Kobe. Also, I don’t see anyone keeping him from winning the title this year. It’s as good as his.
Ryan,
A better example of Wes’ market role would be the technology ‘Evangelist’.
Microsoft, Adobe, IBM and all the equivalent big IT players have evangelist programs – because what they do is arcane. They provide services of immense value, but most of their clients can’t understand how to gain access to that value.
An evangelist’s job is (in 99% of cases) to get to know a bunch of people, and be able to put them in touch with each other. They know enough about the arcane voodoo of whatever product it is they’re hired to evangelize that they can talk intelligently about it, and follow a conversation through from a third party, but they don’t solve anyone’s problems directly. They understand someone’s problem and then they find them someone who can help. Sure they shill and talk about how great whoever they’re working for is – but that’s not why they get paid – they aren’t there to sell anything – they’re being paid to be a go between for people trying to establish networks.
Ideally, somebody who’s doing that sort of work doesn’t want to be known to the general public. They want to keep their relationships limited to the solutions and problems they connect. All a good evangelist needs is the technical nous to be able to joint the dots and an ‘in’ to the the people he needs to connect.
Wes sounds like a douchebag – but in the IT industry at least – his skill set is incredibly valuable to pretty much everyone. It just seems like he’s lucky enough to have something of a monopoly on a very lucrative niche.
Dude, what are you talking about? Your Kobe post is ridiculous. I don’t think there is a single thing in any of my posts about hustling that could be remotely tied to Kobe Bryant.
Maybe you’re right and I am not making sense (wouldn’t be the first time and I am on a weird sleep schedule this week) but I’m not operating exclusively according to ideas put forward in your posts. What’s a hustler? Obviously there are tons of levels to think about that question at, but this works for me on a fundamental level: Someone who is existentially calculating and sells it. Whenever I see Kobe clowning with his teammates, that’s what I see.
Of course, he’s probably just a supertalented guy who was always too ghetto for the rich kids and too rich for the ghetto kids, and so the respect afforded him due to his preeminence will always be unseemly, and the unseemliness of it all is what threw me. But whenever I see him interacting with people my gut screams “hustler! hustler!” There are better examples, but it’s playoff season, and the Celtics are relevant for the first time since the early 90s.
Might not be a bad idea to file all this under the “The NBA: Where Unwarranted Philosophical Speculation Happens” file.
On a side note… Have you read Robert Evan’s autobiography? Was wondering if you recommend it
thanks x
Neither side in this ongoing argument has it exactly right; in the example of Wes, he’s not creating value so much as making it accessible. That’s what networking is, is efficiency. I do agree that some amount of arbitrage is involved, it’s the same for all human interactions.
A man is judged by his associates, and Wes is important (in the VIP sense of the word) because he knows all these people who are more famous than him. These people associate with him because he is the bridge between them and other powerful people, a connection that may or may not have otherwise happened. It’s never a good idea to put all your eggs in one basket (as a pure networker), so I agree that his position is somewhat intangible, but he’s not exactly irrelevant or impotent either.