The 3 and 10 rule
1 min read

The 3 and 10 rule

When a company triples in size, everything breaks.

"The Rule of 3 and 10" was coined by Hiroshi Mikitani, founder of Rakuten and board member of Lyft.

At these intervals, companies have to rethink how they operate. Imagine a company with two founders, starting at a very small scale. Coordination can take place anywhere they typically chat. When you introduce a third person, you introduce the possibility for someone to be left out. You need new ways to coordinate information between all of you. At 10 people, it becomes difficult for everyone to be a part of every conversation.

At 30, it becomes hard to coordinate on working on the same things

At 100, it becomes hard to know all of your co-workers.

And so on and so on. All hands meetings become sub-meetings. 1-on-1 trainings become group training, which becomes recorded lessons and documentation.

This breaking is a feature, not a bug. Growing companies should see it as a challenge to overcome. It's also an inevitable problem: Trying to manage a company of 100 the way you managed 30 is asking for trouble.

It's also a solved problem. Whatever size your company is growing towards, someone has been there before. There are people you can learn from and patterns you can adapt.

If you're an employee at a growing company, it's useful to be aware of this. Are you noticing sea changes in your organization's behavior? Take note of them, and plan on how to navigate your new normal.