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Redefining Job Functions

  • Peter S. Cohan
Chapter

Abstract

Imagine if a CEO could turn an idea into a large company without hiring anyone else. That lonely but economically tantalizing idea remains utterly out of reach, yet some startups have gotten close. For example, Instagram had 13 employees when Facebook acquired it for $1 billion in April 2012, a few weeks before its initial public offering. Instagram built an app that attracted 30 million users and a private market valuation of $500 million. Instagram’s ability to create $77 million worth of value for each employee at the time of its acquisition—4.7 times more than Facebook’s $16.6 million for each of its 30,275 employees— highlights a question of great interest to startup investors and the people in whom they invest: What is the purpose of hiring people and how can a founder manage those people in a way that maximizes the value of the firm? In the case of Instagram, its 13-person staff zoomed from the first to the third stage of scaling by building an app that sold itself to 30 million people without extensive sales or marketing. Most companies, especially ones that sell to businesses, can’t skip directly from Stage 1 to Stage 3.

Copyright information

© Peter S. Cohan 2019

Authors and Affiliations

  • Peter S. Cohan
    • 1
  1. 1.MarlboroughUSA

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