EXCLUSIVE: Paytm uses Jeff Bezos' secret for success — building 'two pizza' teams

• At the Business Insider Global Trends Festival 2020, Patym CTO for Payments Manmeet Dhody revealed that Paytm’s secret to success is akin to billionaire Jeff Bezos — building ‘two pizza’ teams.
• According to Bezos, no matter how big a company gets, individual teams shouldn’t be larger than what two pizzas can feed.
• Dhodhy explains this may be one of the most efficient organisation designs for structuring teams, especially when using data on the cloud.

Paytm’s association with Amazon extends beyond just using their cloud storage. According to the company’s Chief Technology Officer (CTO) for Payments, Manmeet Dhody, they also use the same formula for success as billionaire Jeff Bezos — building ‘two pizza’ teams.

The CEO of Amazon first unveiled the ‘two pizza’ rule back in its early days. His theory is that no matter how big your company gets, individual teams shouldn’t be larger than what two pizzas can feed. For Paytm, that means no more than six to eight people.

“That, in my mind, is one of the most efficient organisational designs for structuring teams,” Dhody told Amazon Internet Services’ Sachin Chawla during the Business Insider Global Trends Festival 2020.


How does the ‘two pizza’ rule work?
According to Dhodhy, small and lean teams that are independent can efficiently exercise ownership over a particular domain. “They’re the single owners of that domain. Nobody else in the organisation owns that domain,” Dhodhy explained.

Not only does this improve agility within the organisation, but it also avoids issues like duplication of data or services.

One way to think about it is as though you’re at a huge party. If there are too many people around, it’s hard to connect with anyone at an individual level. The interactions are likely more shallow.

In comparison, if you're at a smaller house party, you could be sitting next to the host for hours and develop more meaningful relationships.

At its core, the problem is not about the sheer number of people per se — but the number of links between people akin to a multiplier effect, according to Harvard University’s Richard Hackman. The cost of coordinating, communicating, or even carrying out day-to-day tasks tends to snowball after breaching the ‘two pizza’ limit.

Another study of organisational behaviour indicates that larger the team, the people tend to get more overconfident. The authors explain that this is because a larger team size leads people to underestimate the time needed to complete the task at hand.

The catch is that if you have many small teams, they all need to be able to work together and access the company's shared resources to achieve overarching goals. And that's where the cloud comes in.

“The benefits of having a common data infrastructure team are just immeasurable,” said Dhody. According to him, if you don’t have a common data infrastructure, each team ends up building a data point instead of a data link. In the long run, it leads to a lot of wasteful expenditure for the company.

So while small teams make up the foundation of a company, it’s also crucial to have data flowing between them for success. This keeps data in motion and builds data lakes instead of individual silos.

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