The Stories You Remember Aren’t the Ones With a Moral

Jack Ma once shared this experience in a speech: “Back then I wanted to hire a vice president. The company only had five million dollars in total funding, and the first thing he said was, ‘The marketing budget this year — we’ll definitely need at least fifteen million dollars.’ That was because he had previously been managing an annual budget of forty million dollars at a multinational corporation. At my company, the most I could give him was half a million dollars a year. He said half a million wasn’t even enough for a single ad, but I felt half a million was enough for ten ads. It’s a different way of thinking. You should use the right people for the stage you are at, and find people based on your actual needs. Never, ever make the mistake of bringing in a bunch of ‘top guns’ when your company is still small. The company’s own operational mechanisms and management capacity are like a tractor, and the top executives you bring in from big companies are like the engines of a Boeing 747. Once you install those engines, the moment the motor starts, the tractor will be torn apart. So you have to be very careful with team selection; don’t blindly pursue a star‑studded lineup. If you absolutely must bring in a high‑level player, you first need to recalibrate their mindset.

“Take the example of Joe Tsai, whom I met later. He was born in Taiwan, grew up in the U.S., earned his doctorate at Yale, worked on Wall Street, and had an extremely high income. When he told me he wanted to join my company, I was stunned. At that time we only had eighteen people and were working out of my apartment. I asked him why, and he said, ‘I just think this thing is really promising.’ That’s exactly the kind of answer I fear most. So I gave him two weeks to come observe, and also had him take a salary of five hundred renminbi — just so he could see clearly that these were the conditions we were operating under. Later, I went on a week‑long business trip to the U.S. with him. We talked every single day and laid everything out with total clarity. In the end, he still decided to join. He remains our CFO to this day, and I still think he’s the best CFO I’ve ever met. This is the kind of person who will go through thick and thin with you, and who also complements you — he’s not there to tell you what you should do, but to say, ‘Tell me what you want to do, and I’ll help you do it even more perfectly.’”

This passage is remarkably incisive, especially the metaphor of the tractor and the Boeing 747 engine. When Jack Ma says, “The company’s own operational mechanisms and management capacity are a tractor, and the top executives from big companies are the engines of a Boeing 747,” what exactly is “operational mechanisms and management capacity”? It includes the degree of process maturity, the level of job specialization, the sufficiency of budgets, the relationships between business functions and support departments, and even the psychological expectations of employees and founders. These elements differ enormously between small companies and large corporations, and the differences are often invisible and hard to detect, which is exactly what makes them a minefield.

For instance, because of limited personnel budgets, a small company often requires one employee to wear multiple hats. Take a semiconductor design firm as an example: a large company like Intel or AMD will have dedicated positions such as layout engineer and reliability engineer. A startup chip company, on the other hand, will frequently ask its R&D engineers to do the layout work on the side, and have its product engineers handle reliability testing as well. The result is that in every specific type of work, especially mission‑critical tasks, the per capita output can’t match that of peers in large companies, simply because their attention is fragmented by too many support tasks and miscellaneous chores. People often say that joining a big corporation can easily turn you into a cog in the machine, and it’s true that many large companies create roles that only exist internally. After a few years, you might find that the skills you’ve learned are useless anywhere else. For the individual, that’s certainly a downside. But from the company’s perspective, this very phenomenon means more granular specialization, more dedicated support talent, and a more efficient overall organization. That’s a clear difference.

Senior executives who have spent too long in that highly specialized, refined environment often fail to account for the very different realities faced by frontline employees when they parachute into a small company. For example, the R&D staff you previously managed at a place like Google or Apple might have been expected to deliver two new product optimizations per month and produce a certain number of patentable ideas. If you land at a startup and apply that same metric to the engineers there, they’re very unlikely to hit it. If the executive doesn’t go to the front line and carefully observe what each employee is actually responsible for day to day, it’s extremely difficult to pinpoint the real reasons for underperformance.

Similarly, large companies typically have fairly solid systems for information storage, work records, and document archiving. Small companies, by contrast, often operate more like a garage band: sometimes the core know‑how exists only inside the heads of a few key people. The new executive, feeling that progress is blocked, might fire or sideline a few old‑timers, thinking it’s no big deal, without realizing that the company’s critical knowledge was precisely in those individuals’ heads and never got codified into shared institutional knowledge. Once they’re gone, or once they’re no longer willing to give their all for you, business can grind to a complete halt. The underlying logic is the same as before: the deep specialization of a large company makes employees more like interchangeable cogs, reducing the irreplaceability of any single person. Small companies lack that kind of institutional design; certain key roles have a form of non‑formal yet indispensable status. If the incoming executive doesn’t recognize this and doesn’t first figure out who truly holds the lifelines before making bold moves, they are very likely to dig a deep hole for themselves.

The working environment also shapes employee expectations. When a big‑company executive comes in and tries to establish work‑record and document‑archiving systems, the actual implementation inevitably falls on frontline employees. From their point of view, this is nothing but a pile of extra work with no visible short‑term payoff. The typical reaction is: we never did it this way before and things were fine; are you just making us jump through hoops for no reason? The executive, who has long been steeped in an environment where such systems are as natural as breathing, thinks, “Isn’t this totally basic? How could anyone possibly object?” Without sensing this subtle gap in psychological expectations, trying to brute‑force the change will destroy the executive’s credibility very quickly.

Another factor is that the kind of executive a small company can attract is usually from one or even two levels lower in the big‑company hierarchy, unless it’s an exceptionally promising, high‑profile startup that can pull someone at the same level. This difference in rank creates two problems. On one hand, the executive arrives thinking, “I’ve come from a top‑tier firm; I’m basically entering a lower dimension to strike at you country bumpkins. You’d better all fall in line.” On the other hand, this person may not actually have managed an organization of equivalent breadth before, they might previously have led a single small group at a place like Microsoft, and now they’re supposed to run an entire department. The two roles require entirely different modes of thinking and vision, and the executive is essentially learning from scratch. But if their ingrained arrogance prevents them from stooping down to perceive the subtle internal logic of the new environment, grievances from long‑time employees will pile up, and the department won’t deliver results. The moment the founder’s trust starts to erode, the executive’s days are numbered.

The tractor can’t run a 747 engine. The mismatch between a large‑company executive’s expectations and a small company’s reality often proves fatal to both sides.