> Why that is the case in every business, I haven't been able to figure out. I suspect it's because when businesses reach that size, the efficient market effects become greatly overstated in the short term, so these businesses naturally acquire a lot of fat.

i think it's more likely that no business will know in advance who those 100 employees that create value are. It might even be that the combination of those 100 creates value beyond the sum of them individually (lets say, they are in one team).

There are also mundane work - fixing bugs or upgrading libraries, as well as keeping up the infrastructure running.

And then there's the middle management - that comes from the mis-trust that upper management generally have for the "grunts", and this happens all the way thru the organization.

> private equity exists...

and if you look at those companies that did this - very few of them becomes the next big thing. Very few of them actually innovate. Very few of them, even survive.

Private equity is really about taking risks with a failing business, e.g. buying it really cheap, and cut the fat and ride out the storm for hopefully a better future. I dont think any private equity will buy a company that isn't failing in some ways, and try to "make it better".