Organizations

A Very Large Number of Very Small Teams

The intuitive read on a productivity shock is that it kills jobs: do the same work with fewer people, fire the rest. That read is half right and badly framed. Productivity does shrink the headcount needed to ship any given thing. What it does not do is hold the number of things constant. When the team-per-task collapses, the binding constraint stops being “how do I staff this?” and becomes “what else could I build?” The output of that question is not unemployment. It’s an explosion of new teams — what Naval, on a recent episode, called “a very large number of very small teams.”

AI Already Killed the Modern Company. The Org Chart Just Hasn't Noticed Yet

The comet has already hit. The dinosaurs are still walking around.

That’s the uncomfortable shape of what’s happening to incumbent companies right now. The cause of death has arrived — cheap reasoning, agents that coordinate, APIs that glue any two systems together for pennies — but the visible collapse lags by years. Headcount looks fine. The org chart looks fine. Q3 looks fine. And then it doesn’t, all at once, and everyone acts surprised even though the impact landed eighteen months ago. (The framing — “AI has killed the modern company,” and “the dinosaurs didn’t go overnight” — comes from Peter Diamandis’s Organizational Singularity episode, which is the seed this post is arguing with.)

Coase's Law Breaks: When Coordination Costs More Than Building

This piece was sparked by The New Era of Jobs: Organizational Singularity with Peter Diamandis and Salim Ismail. Ismail’s framing was blunt: in an AI-native world, “Coase’s law no longer applies,” because you can now find yourself “building the feature cheaper than having the meeting about the feature.”

Organize Around Intelligence, Not Hierarchy

The org chart is a coordination technology. It exists because someone, somewhere, decided that the cheapest way to move a decision from the front line to the people accountable for it was to stack humans in a pyramid and pass information up the layers. For roughly a century that was true. It is becoming less true by the quarter, and the firms that internalize this first will be built on a different primitive entirely: not a chain of command, but a fabric of intelligence — human and agentic — wired around the work itself.

The Fiduciary Wedge: Why You Still Need a Company

Suppose the cost of running a company really does collapse. Coordination gets cheap because agents talk to agents; execution gets cheap because building the feature is now cheaper than holding the meeting about it. If you take that seriously, the next question is whether you need the company at all — or whether a few people and a swarm of agents can transact directly with the market and skip the corporate overhead.