When It Comes to Innovation, Less People Is More

Today Voice123 is saying ‘good-bye’ to its most senior developer, Javier Acuña. Voice123 is another Torrenegra Labs venture I preside over. Javier is one of the best software architects, developers, and loyal professional I have ever met. I am going to miss him, but I am also happy in knowing that he will have new challenges in his life.

Javier’s case is not unique. A few years ago I was in direct charge of 25 developers and designers. Now, I am only in charge of five. When people leave one of my teams I frequently get asked and listen to rumors about the future of the companies funded by Torrenegra Ventures. People wonder about their jobs and the well-being and future of the businesses. Sometimes they worry… unnecessarily.

In this post I explain why I think that, as an innovator, that lesser projects and smaller teams actually mean more innovation and more fun, and why I have let my teams decrease in size.

Why I Prefer Handling Less Projects

I have been part of several projects that are now profitable: Torrenegra Internet Solutions (founded in 2000), Rentalo.com V1.0 (created in 2001), and Voice123 (founded in 2003). They all have something in common: During their first few years of existence I was able to invest most of my time on each one of them. I had the availability to pay attention to details and to become obsessed with each one of them, one at a time.

At the end of 2004, I started to believe that I could handle several companies simultaneously. As such, in 2005, I was already leading more than ten companies at the same time. Some of these companies had their own general managers, but they directly reported to me. In total, more than 60 people saw me as their “president”. Unfortunately, it didn’t work. Not one of the companies we founded that year became profitable. Some of them even had to be shut down, such as Casting123.com.

Why did that happen? I could blame the team of people I hired, but I must really blame myself. I spread myself too thin. I wasn’t able to pay attention to the details that successful innovation really requires. I figured that out in 2006. Since then, I have been focusing on one project at a time. First in the Version 2.0 of Voice123, which just broke its monthly sales record last month, and now in LetMeGo.

Why I Prefer Smaller Teams

The first profitable version of Rentalo was coded by me in just three months. Voice123, profitable since its third month, was originally coded by Andres, Milton, and myself, in five months. We grew the development teams as those businesses became successful. We were hoping that larger teams would increase our innovation and development capabilities. We even got to have teams with more than ten developers in them.

It didn’t work as expected, either. We found out that the productivity per capita in large teams was just a fraction when compared to the productivity per capita of small teams. In some cases it was so much smaller that the productivity of a whole small team of four people was better than the whole productivity of another team, twice the size. I have learned many lessons in terms of team sizing and productivity:

• The percentage of time invested in communication grows with the size of the team. A team of one requires no communication. A team of two requires a few minutes of communication per day. A team of eight will require several hours of communication per day plus one person dedicated most of the time to communication coordination: A project manager.
• The feeling of belonging to something decreases as the size of the teams grows. Most people feel more important in small teams. As a consequence, people in smaller teams work with more passion and more dedication to their teammates.
• As a team grows, its need for mid-level management arises. When a team is small, the product developer can interact directly with each person of the development team. In larger teams, the product developer will talk to mid-level management (usually a project manager) that will then transfer the ideas to the development team. A lot of ideas and plenty of time gets lost in there no matter how good the team may be.

Because of the reasons above, I have chosen to limit the size of my team. Today only four people see me as their direct leader and two others as their partner. I also get some other added benefits:

• Once again I am able to code myself, something I love.
• I feel I can make smarter business decisions as I know, in depth, our software architecture.
• I have a closer relationship with all the members of my team.
• I am now experiencing the same excitement that I felt years ago when I was innovating first hand and not only on paper.

All in all, I am happier now, with my small team, than I ever was before.

Why I Prefer Experienced Pros vs. Young Geniuses

Hiring experienced people costs more than hiring recently graduated professionals. In fact, the average salaries of our senior developers today are around three times what we used to pay junior developers just a few years ago. Most of them now also get stock options. So, why do I hire one experienced person instead of three genius grads? Here is why:

• Predictability: Experienced people usually know what they want out of life. They are willing to take long term commitments, as the ones required by LetMeGo.
• Need for speed: Obviously, experienced developers are much quicker at coding than inexperienced one’s.
• It is just fun: Although I like to teach people stuff, I like to learn as well. I learn more from experienced pros than from others.

A few years ago I was proud in leading a large team of tech geniuses that we had discovered before any other company had the chance. Today, I feel more comfortable leading a smaller team of recognized, proven professionals.

And Back to Javier…

I am sad. I will miss “Javi” a lot. I even got to invite Javi to stay in our home while visiting New York. He is the only person I know who is willing to take as many risks eating weird food as I do! For that, and many other things, I will miss him as you miss your friends when you graduate from high school. But I am also happy for him. He will be experiencing many new things. Among others, he will be working for a company that will allow him to fully explore his Java skills, which is something he wasn’t able to do in Perl-based Voice123. Hopefully, in the future, we will be able to work together once again. Both of use will have new knowledge and experiences to share to each other.

Am I masochistic or trying to hide my real feelings? No way! I consider that companies are simply tools to achieve the goals of the people that work at them. I don’t expect anybody to be loyal to a company. Instead, people should be loyal to other people. Javi may be leaving Voice123, but I am sure both of us will stay loyal to each other. In fact, if you are loyal to me, the only thing I ask you is to constantly purse your happiness with passion, no matter what the obstacle.

Next week, as Javier leaves, the development team of Voice123 will be an even smaller fraction of what it used to be. Juan Salcedo, Voice123’s General Manager, will have to determine if a replacement for Javier needs to be hired and, if so, when. Whatever decision he makes, I won’t judge them right or wrong. Juan’s success will only be
measured in how profitable Voice123 is in the long term and how happy are the people working at it.

Alexander Torrenegra.

P.S. I don’t like to retain people just by offering very high salaries. A good salary isn’t the only ingredient required by my team members to be happy. They will need many other things as well. I will be able to offer some of those ingredients, but not others. When a person quits I try to retain him/her only if I will be able to give him the tools to grow economically, professionally, and as a human being.

P.P.S. Thanks a lot to Steven, who always helps me proofread and improve my writings on these blog posts. These posts would be twice as boring as they may already be if it wasn’t because of him