Casting a Critical Eye on Expenses of All Kinds

Jason Calacanis, the CEO of a Web search start-up called Mahalo, has posted a list of recommendations of saving money when running a start-up.

What I like about the list is its thoroughness: Calacanis has really thought about where to invest (comfortable chairs so his employees will be able to work long hours comfortably) and where not to (he buys cheap tables, because all a table needs to be able to do is hold stuff). His recommendation to eschew phone lines in favor of IM, Skype, and cell phones reflects a reality I see in other Silicon Valley start-ups. The company phone list and traditional phone lines an anachronism, once everyone's on Skype. I even know one CEO who never answers his direct dial number, because the only people who call him on that line are vendors pitching him services. (How long before tradeshow vendors, printers, and PR firms realize that trolling Skype is probably going to be more productive than looking up phone numbers on Web sites? How long, after that, before executives begin guarding their privacy more closely on Skype and Twitter?)

Calacanis's recommendation to buy employees a second monitor reminded me of some research conducted by Jacob Nielsen, Sun's Web usability expert. Nielsen found:

Big monitors are the easiest way to increase white-collar productivity, and anyone who makes at least $50,000 per year ought to have at least 1600x1200 screen resolution. A flat-panel display with this resolution currently costs less than $500. So, as long as the bigger display increases productivity by at least 0.5%, you'll recover the investment in less than a year.

The examples of cost savings that Calacanis cites probably resonate most strongly with those in software companies. But managers in other industries could do well to think as critically about what employees really need in order to be productive.

Longstanding industry habits and daily routines can lead us to take too much about our work environments for granted. As a result, we might overlook simple changes we can make to increase worker productivity, minimize distractions, and perhaps even increase employee morale. (I'll bet the folks at Mahalo appreciate those monitors and iPhones.) As Calacanis's list shows, it's useful to critique everything from furniture to communication infrastructure, and put as much thought into what you're leaving out as what you're keeping in.