# The company is the first product

By Rea Stark, 13 November 2026
Source: https://reastark.com/writing/the-company-is-the-first-product

> Most companies grow like coral. A founder should design the firm as carefully as the thing it sells: few parts, clean joints, own the core and buy the rest.

Founders spend years on the product and an afternoon on the company. The product gets drawings, prototypes and tests. The company gets a template from a notary and an organisation chart copied from the last place the founder worked. Then it grows like coral, one hire and one committee at a time, and after ten years nobody can say why it has the shape it has.

I am an industrial designer, so I see a company as an object with parts. The questions are the same as for a coffee machine. How many parts does it need? Where are the joints? Which part can be replaced without opening the whole thing? A good product has few parts and clean joints. So does a good company.

## What a firm is for

In 1937 a young economist, Ronald Coase, asked why firms exist at all, when in theory a market could supply every task. His answer was cost. Finding a supplier, agreeing a price and checking the work all cost something, and when that cost is higher than doing the job yourself, you hire. A firm is as large as its transaction costs make it.

Those costs have been falling for thirty years. Software that can read a contract, compare offers and check a delivery is pushing them down again. Much of what sat inside a company because it was awkward to buy can now be bought. What stays inside should be the part nobody else can do.

## Own the core, buy the rest

Nvidia designs chips and owns no factory that makes them. In its 2025 financial year it turned over $130bn with about 36,000 people. Volkswagen needed some 680,000 people for €325bn in 2024. The two are in different trades and the comparison is unfair. It still shows what happens when a company keeps the thinking and lets others own the machines.

The opposite mistake costs as much. Boeing handed around 70% of the 787, including much of the design, to partners across the world. The aircraft arrived more than three years late. Boeing had given away the knowledge of how the parts fit together, which was the one thing that made it Boeing. You can buy capacity. You cannot buy an understanding of your own product, and a company that tries ends up as a logo with a purchasing department.

So the first design decision is to name the core in one sentence. In most companies I know it is some mix of the design, the brand and the data. Everything else is a candidate for a contract.

## Small units, real owners

The second decision is size. I build small companies that each do one thing, under a holding that supplies capital and keeps out of the way. Ten people who own their result behave differently from a department of ten inside a group of ten thousand. They know their customers by name, and they cannot hide a bad quarter in somebody else's budget.

The third is ownership. A salary buys attendance. A share of the outcome buys attention. I would sooner have five people who own part of what they build than fifty who are waiting for Friday. I do not do this to be generous. Owners supervise themselves, which makes it the cheapest control system there is.

## What I would not copy

None of this is an argument for the company without structure. Someone decides, and everyone knows who. The fashionable alternative, the firm as a flat network of equals, mostly produces meetings.

Nor is small always right. Aircraft, chips and power stations need scale, and somebody has to own the factory. But even there the companies that last are built from small units that answer for themselves. The family firm with three hundred people and half of a world market has understood something the conglomerate forgot.

A company is the tool its founders work with every day, for decades. It deserves at least the care we give a kitchen appliance. Draw it before you build it. Count the parts. Then take a third of them out.

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Rea Stark is an industrial designer and founder in Zürich. He has designed for Sony and Nespresso, co-founded Piëch Automotive and Archaí Physics, and works on how machines see, understand and use the physical world.

About the author: https://reastark.com/about
More essays: https://reastark.com/writing