A Small Business Can Be a Highly Profitable Company

David Heinemeier Hansson, 37signals

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Asked to clarify the difference between a small business and a scalable business that hopes to earn a billion dollars, David Heinemeier Hansson, partner at 37signals, says they are the same thing. Scalable for Heinemeier Hansson means there isn't a direct correlation between profit and employee count: I can earn 5 million dollars and not hire five people. Many large companies give the impressions that that there is a connection -- i.e., for every $500,000 earned, a company must hire two people -- so smaller companies wrongly focus on organizational charts and meetings. He points out that 37signals is both a small business (15 employees) and a highly profitable company.

Jan 20, 2010

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