Budgeting

Ben Horowitz proposed an alternative way to budget¹:

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1. Take the constrained number that you created and reduce it by 10-25% to give yourself room for expansion, if necessary.
2. Divide the budget created above in the ratios that you believe are appropriate across the team.
3. Communicate the budgets to the team.
4. Run your goal-setting exercise and encourage your managers to demonstrate their skill by achieving great things within their budgets.
5. If you believe that more can legitimately be achieved in a group with more money, then allocate that manager extra budget out of the slush fund you created with the 10-25%.

1.

Horowitz, B. How to Ruin Your Company with One Bad Process | Andreessen Horowitz. https://a16z.com/how-to-ruin-your-company-with-one-bad-process/ (2014).