Workers at co-ops are generally not like investors or VCs, in that they long for moonshots and “rocket ships.” They’re usually regular, risk-averse working- or middle-class people. Expanding the company, even hiring just one new worker, carries an associated risk: that the new worker will be less productive than the median[1] worker already at the firm, making you worse off than if you hadn’t hired them.[2]
This creates a huge pressure to not expand in size unless it’s absolutely clear it will be great for those who already have a stake in the firm, which very rarely happens.
Indeed. But it’s even trickier than that.
Workers at co-ops are generally not like investors or VCs, in that they long for moonshots and “rocket ships.” They’re usually regular, risk-averse working- or middle-class people. Expanding the company, even hiring just one new worker, carries an associated risk: that the new worker will be less productive than the median[1] worker already at the firm, making you worse off than if you hadn’t hired them.[2]
This creates a huge pressure to not expand in size unless it’s absolutely clear it will be great for those who already have a stake in the firm, which very rarely happens.
edit: Vaniver points out correctly that it should be the mean.
Which makes sense, at least in the short-run: it takes time to get acclimated to the working standards at the firm and to learn the ropes, so to say.
Isn’t it actually the mean instead of the median, which is an even harder target to hit?
I think you’re right.