The Cycles of Subculture, and Why I Refuse to Work at Large Companies

One of my most closely-held beliefs (which I am very unlikely to ever change my mind on) is that scale destroys things. The bigger something becomes, the worse it becomes.

The example I am usually thinking of is companies. Most people I know agree that the bigger a company is, in general, the worse it is as a workplace. You can even see this play out in real time (as I did at my last job) as your company grows and grows and continues to do more idiotic and less effective things, while providing perverse behavior incentives and rewarding all the wrong people.

It starts making corporate decisions, instead of reasonable decisions. It starts implementing routines and procedures to ensure compliance and prevent mistakes; it starts drowning itself in paperwork and reports and meetings. And it expects employees to fight to the death every year for a 2% raise and a company-branded mug.

One reason for all this is that the bigger a company grows, the less access it has to an adequate pool of talent to fill all the positions it needs to fill. Smaller companies can run on the backs of 2-5 extremely talented individuals and a single great leader; most big organizations can’t possibly access enough great people to keep things running that well.

A second reason size tends to ruin companies is economics.

For instance, here’s what happens with T-shirts: every company I have ever found that makes great T-shirts ends up pursuing better economics as they grow — cheaper manufacture, worse materials — and ends up throttling the quality of the shirts. What started as a vision to make thin guys like me look good ends as nothing more than another big company with another mediocre product. And I’m left crying myself to sleep because yet again I can’t find any T-shirts that look good on me.

A third reason size tends to destroy companies is what this essay is about.

If you have an extra 10-15 minutes before you read this piece, I strongly recommend Scott Alexander’s A Cyclic Theory of Subcultures. His essay has helped me give a working model to thoughts I have long had about the size of things and the social and economic behavior that comes with size. And it’s just a great essay.

Alexander doesn’t focus on companies, but movements and subcultures. I think there are parallels. He outlines a four-part model of the growth and decay of subcultures:

• Phase 1: Precycle

• Phase 2: Growth

• Phase 3: Involution

• Phase 4: Postcycle

The variable at play here, the variable that drives the cycle in movements and subcultures, is status.

In Phase 1, there’s a movement or an idea or a group of nerds doing a thing. You’ve known some nerds in your life — this is what nerds do. They are honest about what they like, and they pursue it regardless of what anyone else thinks. This can be cultural interests like Star Wars or anime, or it can be much more involved lifestyles like karate, cryptocurrency, or obscure philosophies.

In this phase, status is not part of the equation. Nobody is chasing anything other than joy or success at the thing they’re doing. They just do it because they like it, and they are tickled pink when other genuine people join them.

In Phase 2, people who had nothing to do with the group or idea join it. A lot of the people who start joining are not genuine. The subculture slowly gets hijacked.

Some people join out of fascination and interest, of course. But not everybody. Think about when people collected Pokémon cards when we were kids. Few people actually wanted to get together on weekends and play the card game. Few people actually understood balanced deck-building or strategy. What did everybody really want? They wanted to be the only kid at school who had a Charizard. That’s it.

In a neighborhood I grew up in, there was a kid who had a Charizard. He was a fat slob and a loudmouth, but he was still higher in status than me. Why? Because he had a Charizard. He had the holy grail of the current moment of our lives.

It takes very little time for the new thing to become about status. It’s often the primary reason people other than the central nerds or idealists get involved at all. People learn a few sentences of information about the thing, figure out what would equate to high status in the thing, and join it just to pursue that.

There are going to be counter-examples, as with anything. Like skateboarding in the 1970s for instance. Some people joined for status, inevitably, but perhaps most kids joined because they really did want the athletic, thrilling side of skateboarding.

Beanie Babies in the late 1990s was a status game. It wasn’t about the love of small stuffed animals, it was about having a better collection than the lady down the street.

Everything we’ve discussed so far can also apply on some level to political movements, social projects, and ideologies.

Alexander says that the movement grows in three ways: through forward movement (better ideas, more talent), upward movement (better infrastructure, communication, and community events), and outward movement.

This is where the fun begins.

“All subcultures are, in a sense, status Ponzi schemes.”

In case you're not familiar with a Ponzi scheme, it's an investment scam where older investors are paid back with money from new investors. In some cases there’s no investing going on at all — it’s just a pool of money with completely made-up goals that aren’t actually being pursued. It's a scheme where the very nature of the system relies on a constant flow of new investors, and the only value proposition is that there will always be someone next in line, waiting to get in. (This is literally what Social Security is.)

Once the line dies down and no one else wants in, the music stops. You can't pay off the old investors because there's no new money. And the leader of the Ponzi scheme gets revealed as the fraud that he is.

This is how subcultures tend to work. The movement is only exciting as long as new people are coming. So that the people who have already been here can profit from having been here longer. When there are no newcomers, the newest members are devastated that they can no longer socially profit from having joined.

Where I went to school, once in a while you’d see a gothic kid. They’d dye their hair black, wear enormous jeans and capes and makeup, and behave in a brooding anti-social manner. But I noticed something. You were only cool, as a gothic kid, if you weren’t the latest one to make the switch. You were only cool as a goth if someone else followed your lead. Otherwise you were just weird and desperate for attention.

Your coolness depended on someone else trying to be you.

In a subculture, a movement, or even in a company, the existing members rely on new members to provide them with status. Money and security too, in the case of a company, and perhaps a better product. But mostly status. Which makes sense in a company, because money is a direct byproduct of status.

In Phase 3, the entire thing turns into a fight. Phase 3 is called involution, which means a sort of inflation period. More people fight for fewer resources and rewards, getting increasingly vicious as the pool of rewards gets smaller.

Having exhausted all of the easy ways to earn status (i.e. being first), people begin fighting amongst themselves. Star Wars fans will argue over what is canon and what isn’t. They’ll argue over which movie is cinematographically better, and attack each other for having outdated views on which characters had the most compelling and believable arcs. Having lost the positive energy of agreeing on good things, they’ll resort to the negative energy of being right about details.

Here's a piece by R.W. Richey that suggests that this involution might be happening to Western culture as a whole. And I don't think that's wrong.

In cryptocurrency, we have seen this in the formation of competing high-status blockchains and philosophical arguments over what cryptocurrency is and isn’t. People will try to obtain more important roles in the community by being “right” about what kind of cryptocurrency is real cryptocurrency.

Not even because they want to be right, or because there can only be one correct answer. Because that’s almost never true — there is usually more than one right answer. It’s because people want to lift themselves up by putting others down.

This process often isn’t malicious; as Alexander argues in his piece, the decay of a subculture does not require being invaded by sociopaths. People usually don’t threaten each other's families or blackmail each other over what is or isn’t canon in Star Wars. We just treat each other badly to advance ourselves. Because that’s how human beings are.

Accusations fly about fidelity and truth, and idealist philosophies about the thing tear former allies apart.

And that’s Phase 4. People move on because there’s nothing left to be gained from sticking around. There’s no status left unless you steal it from someone else.

From there, a few things can happen.

One, the movement or trend can die down and return to an obscure corner of the wider culture. The movement kills itself and only the core nerds/idealists/activists are left.

Two, the movement can fragment into different groups who now think they understand the truth better than all the other fragments. (Think of all the different denominations of Christianity.)

Or three, the subculture becomes institutionalized. Maybe it becomes a political party. Maybe it can “become a real boy”: it can grow up into a real cultural fixture complete with its own myths and heroes (e.g. social movements or technological subcultures). It can become like the modern sciences with their comically elitist peer-review charades.

Or, in the case of a company, it can finally settle into its very own slice of corporate bureaucracy.

The philosopher A.N. Whitehead said, "A civilisation flourishes until it starts to analyse itself.” There are at least two meanings baked into this statement. One is that a good thing stops being so good once you measure it and ask how good it is. Because then you have expectations about it. Then you have scores you’d like to keep.

But another is: when something is no longer a project of pure, unmitigated passion, it becomes a project of maintenance. When you're having a blast playing hide and seek for 2 hours as a kid, and then suddenly you snap out of it and wonder how long you've been playing and if everyone else is still having fun, and if anyone is hungry... the fun is over. You’re no longer lost in the moment.

Similarly, once a business reaches a critical mass and begins having to make "corporate" decisions, it's never the same again. Never again will it have the mysterious magic of a small business, a small group of people whose contagious energy sustains one another. It becomes dry and ineffective. It begins to bloat.

All of this status Ponzi scheme stuff is one reason I'm no longer willing to work typical corporate jobs. At this point it's unlikely I'll ever work at a company bigger than 100 people again. Because it just isn't worth doing. There's no magical energy. Everything is a contest. You're constantly competing to get noticed, even if you're clearly outstanding at your job.

Big companies don’t incentivize you to be creative, to think outside the box, or to believe in magic. They incentivize you to care about status. They incentivize you to play anti-social political games against your co-workers and bosses.

I find that working for a small company (like Spectra Markets, where I’m currently the business manager) brings balance to the possibilities.

In a small company, so many things can go wrong... but so many things can also go right. For you, your reputation, your income, your career, and the idea you’re working on.

In a big company, just as many things can go wrong for your career, your income, and your work environment... and far fewer things can really go right. You get all the downside of being a hard-working person, with little of the upside. Especially if you’re not willing to play anti-social status games.

And it's hard to shake the feeling that, when I'm working at a large company, I'm basically just working to provide glory to the people who were here first.

Now this isn't to say that you should just go through life trying to be first at everything so that you can beat the system. That’s not good either. You have to have things to be nerdy about with no strings attached. Passion is good.

And this also isn't to say that you can't make something of yourself at a big company. Because of course you can. But it's worth asking... might it be mathematically more likely to make something of myself at a smaller company? Might I have more fun at a smaller company anyway?

Yes, yes I might.

Drink some water and do magic.

JDR

“Hair on a man's chest is thought to denote strength. The gorilla is the most powerful of bipeds and has hair on every place on his body except for his chest.” - Anton LaVey