Naval Ravikant: "The Future Will Almost Entirely Be Composed of Startups"

"I firmly believe that the most efficient scale for companies is shrinking very rapidly, so the future will almost entirely be made up of startups."

In the following excerpt from a 2012 interview, Naval speculates that information technology will reverse the centralization power brought about by economies of scale after the Industrial Revolution.

"I think the trend toward contract work will become stronger, and I also believe that the average size of an ordinary company will get smaller and smaller. I believe we will see more and more billion-dollar companies built by four or five people, and they will stay at that scale."

He does not think we will see many companies like Facebook or Google with tens of thousands of employees:

"I believe that any decent entrepreneur today can build Facebook with a few hundred people... Facebook and Google are in a situation that all large companies eventually fall into: founders know that 80% of the people are actually unnecessary, they just don't know exactly which 80%."