8 laws driving success in tech: Amazon’s 2-pizza rule, the 80/20 principle, & more

Viewed in CB Insights.

What ultimately leads some technology companies to be immensely successful while others fail completely?

It is a question that has been given great thought, which in turn has given rise to actual schools of thought that have been ingrained in business teachings on the industry. CB Insights focuses on eight on them.

Moore’s Law

“Moore’s Law” is perhaps the most widely known. It was developed in the very earliest days of technological innovation, in 1965, by Intel co-founder Gordon Moore.

Moore’s Law dictates that “every year, semiconductor manufacturers were able to double the number of transistors on a single on a single microchip and halve the cost of building them.”

A decade later, Moore amended his law, stating that transistors on a single microchip would actually double every two years.

Metcalfe’s Law

“Metcalfe’s Law” is not as broadly known as Moore’s Law, but it too has proven hugely influential. Metcalfe Law was developed in 1980 by one of the founders of the Ethernet, Robert Metcalfe. His law dictates that communication networks increase in value in proportion to their users.

For instance, if there were only one phone, that phone would have essentially no value. But once phones became widely-held, they became nearly indispensible as a means for communication.

This law has been adopted more recently by social media networks, including Facebook, which have been deemed as increasingly essential as their use by consumers for communication have become vastly widespread for both businesses and invididuals.

Gall’s Law, Two-Pizza Rule and Conway’s Law

CB Insights also provides background and analysis on six other technology rules: “Gall’s Law” (why simple systems prove the best products);

the “Two-Pizza Rule” (the philosophy, adopted by Amazon, that dictates that teams need to be small enough that they can be fed by two pizzas, or they become too large, less innovative, and more bureaucratic);

“Conway’s Law” (which dictates that a team’s structure ultimately is reflected in the product or products it designs), and three other laws that have driven technology companies and innovation the past few decades.

About The Best Business Reads

One of our goals at The Official Board is to bring relevant business content and information. In this space, we feature summaries of the best business reads we encounter each month. To make suggestions, please contact@theofficialboard.com.