Building Barrels, Not Bottlenecks

There’s a video circulating about barrels and ammunition as a metaphor for organizational scaling. It features famed VC Keith Rabois discussing the difference between “barrel people” and “ammunition people.”

In essence, as a company scales and hires more people, it often excels at bringing in “ammunition” experts—those who operate with high velocity to execute tasks within a defined framework, or “barrel.” A barrel represents a business or product line. You could have an abundance of ammunition, but your organization’s capacity for growth is limited by the number and quality of barrels it has. According to Rabois, scaling effectively requires hiring leaders who can design and build new and better barrels, not just ammunition to fill existing ones.

This metaphor resonates with any leader who has tried adding more developers to a software project, only to see progress slow down, or who has pushed for more sales, only to find the client onboarding process bottlenecked. The problem isn’t resources; it’s the efficiency and capacity of the organizational barrels.

While the metaphor is insightful, be cautious of seductive sounding advice from VCs and other influencers. Scaling isn’t just about hiring the right barrel builders. Blindly following this approach can lead to wasted time, energy, and opportunity—and might even jeopardize your core business.

So, what should you do? Here are five practical tips to scale effectively while avoiding common pitfalls:

1. Lifecycle Stage Matters

If your business is in the pre-product-market fit stage, don’t try to build more barrels. First, focus on achieving product-market fit for your core business. As Marc Andreessen famously said, startups have two phases: pre-product-market fit and post-product-market fit. Building new barrels is a post-product-market fit opportunity. Attempting to scale prematurely by adding barrels will likely cause your business to faceplant.

2. The Core Foundation Is Critical

If your core business isn’t set up correctly, it may reject new barrels like an immune system attacking a foreign body. Even if the core team verbally supports the new barrel, their competing priorities can make it seem like a distraction. Through my coaching experience, I’ve seen that organizations often don’t realize the limitations of their current structure until they attempt to launch a new barrel. A CEO preparing to build new barrels must first redesign the core business to become a barrel-building machine.

3. Effective Barrel Builders Are Entrepreneurs

A barrel builder’s workstyle must be geared toward holding a vision, driving results, and finding innovative solutions. Whether you call them entrepreneurs or intrapreneurs, they need a high degree of initiative and resilience. They won’t tolerate excessive red tape or naysayers and may clash with organizational inertia. When hiring or promoting a barrel builder, prioritize hard-charging producer-innovators over project-managing peacekeepers.

4. Limit the Scope to One Stage

When conceptualizing a new barrel, it’s tempting to envision its full potential and hire or fund the initiative accordingly. Don’t do this. Avoid presupposing demand. Instead, chunk the project down and focus only on the next lifecycle stage. For example, if it’s a new initiative, limit the scope to moving from zero to the late pilot/early “Nail It” stage. If it’s an emerging barrel with early product-market fit, focus on progressing from “Nail It” to “Scale It.” Once the barrel reaches the “Scale It” stage, you can expand resources to unlock its full potential.

5. Co-Evolve the Core Business with New Barrels

If your core business is at the mid “Nail It” to early “Scale It” stage, and its foundation—structure, leadership, metrics, and operating model—is optimized, you’re ready to launch new barrels. As you appoint entrepreneurial leaders, limit each barrel’s scope to its next stage. This approach allows the core business and new barrels to co-evolve. It simplifies leadership selection, ensures proper resource allocation, and builds your organization’s capacity to identify, launch, and grow barrels successfully over time.

In Summary

Scaling effectively requires more than hiring barrel builders. It demands aligning the core business, selecting the right leaders, and limiting scope to the next lifecycle stage. By following these principles, your organization can transform into a barrel-building machine, with each barrel designed for its unique mission and stage.

Additional Resources

If you’d like to dive deeper, here are some recommended readings and tools:

1. How to Launch the Second Business Unit
2. The Top Ten Signs It’s Time to Change Your Structure
3. PSIU Assessments (workstyle assessments to identify style and stressors)
4. The Designed to Scale CEO Coaching Program (perfect for redesigning the core business to become a barrel-building machine)

Cheers,Lex