The 20-Person Test: Alejandro Betancourt López on New Products
Every company that leads its market eventually faces the same budgeting question: how many people should work on things that might never sell? Alejandro Betancourt López answered it with a worked example during a 2023 interview, and the example is easy to run with real numbers.
Start with a firm of 100 employees that already holds first place in its category. Move 20 of them onto new products. Then watch what happens to the other 80, and to the profit line, over the next two years.
Running Alejandro Betancourt López’s Numbers on 100 People
The first risk falls on the core business. Those 80 remaining workers may start “losing market share because you’re not producing enough product,” he said, or because customer service slips below what buyers expect. Leaders want to test new ideas, he explained, but the testing should never pull focus “of where you are good and where you’re number one.”
Alejandro Betancourt offered two fixes. A company can shrink the experiment to 10 people, or it can hire 10 more and accept a smaller margin for a while. “You sacrifice part of your EBITDA. But that’s fine,” he said, because investors tend to accept lower earnings “as long as we keep market share.”
Then comes the upside case that makes the math worth doing. “What about if those 20 people bring you a new whole market, that double revenue in the next 24 months?” he asked. Leadership, in his account, has to weigh that possibility against the risk and then present the plan clearly to the board.
Alejandro Betancourt López treats the whole exercise as a search for balance between new bets and the work that keeps a company on top. “So you gotta find that equilibrium,” he said.
How Companies Fence Off Experiments
Some of the largest employers in the United States have written comparable rules into policy. 3M’s “15% Culture” lets employees “set aside a portion of their work time to proactively cultivate and pursue innovative ideas,” according to the company, and it credits that time with Post-it Notes, Multilayer Optical Film and Cubitron abrasive grains.
Google’s founders went further in their 2004 letter to prospective shareholders. “We encourage our employees, in addition to their regular projects, to spend 20% of their time working on what they think will most benefit Google,” they wrote. “Many of our significant advances have happened in this manner.” AdSense for content and Google News, the letter said, “were both prototyped in ‘20% time.'”
His 20-in-100 split matches the Google figure exactly and runs five points above 3M’s. Hawkers, the eyewear group Alejandro Betancourt López chairs, keeps its designers busy, releasing around 225 designs annually according to Alicante Plaza.
