Generalized business advice or generally accepted wisdom is useless, just as blanket pronouncements about the “right” size of beak for a particular bird species is meaningless. Different environments produce different creatures. In the world of business different industries, countries, and stages of company evolution will produce wildly different best practices and “rules” by which to live. Throw into the mix a differing set of goals — from lifestyle businesses that are kept small by design to the fastest growing venture backed startup — and the rules will change even more.
Jason Fried recently pronounced that Joel Spolsky‘s assertion that growth is essential for his software as a service bug tracking software company to keep up with competitors. Jason’s 37 Signals has succeeded wonderfully with a small team, a focus on simplicity, and by saying “no” far more often than not. Joel however, may not wish to remain small, he may wish to be a large player in the market which might require greater investment and marketing spending. And it may be that bug tracking IS a network effect business in certain respects. Both are wrong. Both are right. Thus we arrive at the most unsatisfying of answers: It Depends.
For every hard, unwavering proclamation by a successful business person one can find an equal and opposite rule from an equally successful business person.
Just as species evolve to thrive in a particular environment so too do businesses survive and thrive in their own particular environment in pursuit of their own ends.
This helps resolve the seemingly contradictory paths one might take, for example, in the design of a product or service along the spectrum of open vs. closed development, of open source vs. Apple. Both are right, both are wrong. It depends on what your environment, goals, company position, and industry are.