Yahoo CEO Marissa Mayer offered some insights into how Google kept its scale from going overboard in the early days — and it involved currency and a blackmarket.
In an interview published from Chris McCann’s class notes at Stanford on Medium, Mayer explained to Chris Yeh, an employee at Wasabi Ventures, that after starting her career with Google in 1999, things changed once Eric Schmidt joined the team. He shot down Google’s plan to double its size from 200 people to 400 at the time, convinced they couldn’t “keep [their] quality and culture at [their] high bar” by doing so.
“He made the decision to only let the company hire 50 people in total for the whole year (down by 4x) and enforced this using these things called ‘Larry and Sergey dollars,'” Mayer explained.
That’s right, Schmidt created physical, laminated currency that were used as a hiring tool.
“Eric literally had laminated bills printed out and when you hired someone you would have to hand in a Larry and Sergey dollar along with their paperwork,” Mayer went on to say. “There became this huge black market for Larry and Sergey dollars which actually made things more efficient.”
She explained that in the “black market,” if someone from sales needed an engineer to complete something, they could entice or negotiate with the engineer to move faster by “using Larry and Sergey dollars to make sure the work got done.”
Mayer said it was a tough to adjust to, but it taught her an important lesson about scaling and where to put focus.
“As painful as it was, it made us much more thoughtful on how we scaled in the early days on prioritising which was the most important people to add,” she said. “Hypergrowth is fun but you have to be careful.”