The Rule of Creative Isolation

April 27, 2007

My company will be invulnerable to innovative stagnation and incumbency collapse. To do this, when the company reaches 162 people it starts giving two fully-payed-months to 27 people to go and start their own companies. This means that every two months, 27 people leave the organization and 27 come back.

Most of these groups will break off into two and three person founding groups. These people would be cut-off entirely from the management structure and strongly discouraged from communication with the central corporation. You would not be allowed to come to work.

Some of you may be familiar with Google’s policy of 80/20 time. 80% of the time you work on company projects, and 20% is reserved for your own. But since you are connected to the social structure, no matter how liberal the management, you still end up working 120% of the time if you choose to work on side projects. This problem is why the breach between the central company and the startup teams has to be severe for true innovation to occur.

The advantages to this internal form of startup is that if you fail, you still keep your job. And most of the projects will fail. But some of them will succeed and cause the company to grow. As the central group grows beyond 162, it will spawn groups based on these internal startup successes.

Of course, compensation will have to match people’s time investment, otherwise it will make more sense for people to leave the company and start their own companies. So if your internal startup succeeds, it will be absorbed by the central company and the startup team will get a reward equivalent to being acquired in the startup market.

One Response to “The Rule of Creative Isolation”

  1. Jeff Lindsay Says:

    And a two month period is a great creative constraint! I like this idea a lot. I think it makes more sense that going into it the central company gets a certain amount of ownership for paying for those two months, and afterward the central company can put more money in, buy it entirely (or mostly) from the other founders, or possibly sell it off… either to another company or an investor to help take it in whatever direction it needs to go.

    The central company is always going to need some amount of focus and strategy. If the new startup doesn’t fit in that strategy or the strategy can’t be changed to take advantage of the startup, it would make more sense to hand it off and make money in the process.

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