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Small Squads
The thing to know is that a form of governance structure is needed once a group of people (=company) exceeds a certain number of people. Up until that point, the self-organising, wild, everyone knows everything and spontaneous kind of organisation actually works quite well. You know this if you ever played "escape the room" where you are in a group of 5 or so people and you all have a common goal (escape) but face a lot of uncertainty and obstacles (traps and challenges). It doesn't matter if you haven't played escape the room, you'll probably have observed this phenomenon in other circumstances: e.g. organising a BBQ with some friends, etc. This is nice. The group is small enough that it's obvious to most people who has what strengths, and weaknesses, who is suited to what task. And the form of wild communication where everyone talks to everyone is effective: the volume of information is digestible so most members of the group are able to participate in most conversations and it's not overwhelming to filter out the bits that are not relevant, and conversely to hear that what is. You'll probably also have noticed that once the group exceeds a certain size, this form of self-organisation breaks down, factions arise and the niceness generally evaporates.
The classic tool to solve this problem is a hierarchical structure where orders flow from the top, via a chain of line managers, who ultimately deliver messages to the people doing the actual work. This approach is conceptually simple, and is simple to enforce. But it has some drawbacks:
Lines of communication are typically stiff. And sometimes they prevent you from talking to that one person you really want to talk to.
This is a big one: the people who are most removed from the action are making most of the big decisions. The people who are closest to the action and have access to the most correct and up-to-date information have the least power to act on this information.
The barriers between departments are often reflected in the products that the company produces. In other words, the dysfunctions of the products are often mirrored in the dysfunctions of the organisation that created the product.
9Y's organisational structure tries to retain that organic energy and intimacy that a small squad has, while allowing the company to scale.