Sitemaps
How We Secretly Lose Control of Our Startups
Should Kids Follow in Our Founder Footsteps?
The Evolution of Entry Level Workers
Assume Everyone Will Leave in Year One
Stop Listening to Investors
Was Mortgaging My Life Worth it?
What's My Startup Worth in an Acquisition?
When Our Ambition is Our Enemy
Are Startups in a "Silent Recession"?
The 5 Types of Startup Funding
What Is Startup Funding?
Do Founders Deserve Their Profit?
Michelle Glauser on Diversity and Inclusion
The Utter STUPIDITY of "Risking it All"
Committees Are Where Progress Goes to Die
More Money (Really Means) More Problems
Why Most Founders Don't Get Rich
Investors will be Obsolete
Why is a Founder so Hard to Replace?
We Can't Grow by Saying "No"
Do People Really Want Me to Succeed?
Is the Problem the Player or the Coach?
Will Investors Bail Me Out?
The Value of Actually Getting Paid
Why do Founders Suck at Asking for Help?
Wait a Minute before Giving Away Equity
You Only Think You Work Hard
SMALL is the New Big — Embracing Efficiency in the Age of AI
The 9 Best Growth Agencies for Startups
This is BOOTSTRAPPED — 3 Strategies to Build Your Startup Without Funding
Never Share Your Net Worth
A Steady Hand in the Middle of the Storm
Risk it All vs Steady Paycheck
How About a Startup that Just Makes Money?
How to Recruit a Rockstar Advisor
Why Having Zero Experience is a Huge Asset
My Competitor Got Funded — Am I Screwed?
The Hidden Treasure of Failed Startups
If It Makes Money, It Makes Sense
Why do VCs Keep Giving Failed Founders Money?
$10K Per Month isn't Just Revenue — It's Life Support
The Ridiculous Spectrum of Investor Feedback
Startup CEOs Aren't Really CEOs
Series A, B, C, D, and E Funding: How It Works
Best Pitch Decks Ever: The Most Successful Fundraising Pitches You Need to Know
When to Raise Funds
Why Aren't Investors Responding to Me?
Should I Regret Not Raising Capital?
Unemployment Cases — Why I LOOOOOVE To Win Them So Much.
How Much to Pay Yourself
Heat-Seeking Missile: WePay’s Journey to Product-Market Fit — Interview with Rich Aberman, Co-Founder of Wepay
The R&D technique for startups: Rip off & Duplicate
Why Some Startups Win.
Chapter #1: First Steps To Validate Your Business Idea
Product Users, Not Ideas, Will Determine Your Startup’s Fate
Drop Your Free Tier
Your Advisors Are Probably Wrong
Growth Isn't Always Good
How to Shut Down Gracefully
How Does My Startup Get Acquired?
Can Entrepreneurship Be Taught?
How to Pick the Wrong Co-Founder
Staying Small While Going Big
Investors are NOT on Our Side of the Table
Who am I Really Competing Against?
Why Can't Founders Replace Themselves?
Actually, We Have Plenty of Time
Quitting vs Letting Go
How Startups Actually Get Bought
What if I'm Building the Wrong Product?
Are Founders Driven by Fear or Greed?
Why I'm Either Working or Feeling Guilty
Startup Financial Assumptions
Why Every Kid Should be a Startup Founder
We Only Have to be Right Once
If a Startup Sinks, Founders Go Down With it
Founder Success: We Need a Strict Definition of Personal Success
Is Quiet Quitting a Problem at Startup Companies?
Founder Exits are Hard Work and Good Fortune, Not "Good Luck"
Finalizing Startup Projections
All Founders are Beloved In Good Times
Our Startup Culture of Entitlement
The Bullshit Case for Raising Capital
How do We Manage Our Founder Flaws?
What If my plan for retirement is "never retire"?
Startup Failure is just One Chapter in Founder Life
6 Similarities between Startup Founders and Pro Athletes
All Founders Make Bad Decisions — and That's OK
Startup Board Negotiations: How do I tell the board I need a new deal?
Founder Sacrifice — At What Point Have I Gone Too Far?
Youth Entrepreneurship: Can Middle Schoolers be Founders?
Living the Founder Legend Isn't so Fun
Why Do VC Funded Startups Love "Fake Growth?"
How Should I Share My Wealth with Family?
How Many Deaths Can a Startup Survive?
This is Probably Your Last Success
Why Do We Still Have Full-Time Employees?
The Case Against Full Transparency
Should I Feel Guilty for Failing?
Always Take Money off the Table

Staying Small While Going Big

Wil Schroter

Staying Small While Going Big

The most ambitious companies grow their products, not their teams.

Back in 2002, I was invited by (now) Managing Partner Roelof Botha to come pitch the partnership of famed venture firm Sequoia Capital. While I was sitting in their lobby I noticed two things that I'll never forget.

First, like most venture firms, they had a giant list of "tombstones" on their wall, which are the plaques they create after a company goes IPO. The list was already impressive back then which included companies like Yahoo!, Electronic Arts (EA), and Cisco among many others. It was the "who's who" of venture investments globally at the time.

The second was that there were maybe 20-30 people in the entire office — and this was back when everyone was in the office. I have no idea how many people worked there, but what struck me was how so few people could have such an outsized impact on the world. I fell in love with the idea of a small staff doing massive things.

The Beauty of a Tiny Staff

While we love to celebrate headcounts and growth, we often overlook the compounding problem that growth creates. As Craig Newmark of Craigslist told me, "Size creates dysfunction." At the time he told me that, I'll never forget he had 37 people working for him generating hundreds of millions in revenue.

As we add staff, we simply get bloated. We lose efficiency, speed, personal connection, and momentum. A tiny staff, which is pretty much what we all start with, can move quickly, communicate effectively, and feel more like a cohesive unit. When startups scale, the OG members of the company almost always bemoan "the good old days" when things were smaller and more tight-knit. They're often not wrong.

Typically the reason we set out to grow our staff was to accommodate the scale of our business. But what if we looked at scale differently? What if we considered it more of a liability than an asset? Would we still be so quick to staff up?

Scale Function, Not Staff

Another great piece of wisdom I gleaned came over lunch with David Heinemeier Hansson, the Co-Founder of Basecamp who is another company that has stayed notoriously small. He had scaled Basecamp to tens of millions of dollars and maintained a staff of less than 50 people. When I asked him how they could remain a 50-person company with a 500-person amount or revenue, he simply said, "We look to scale function, not staff."

The way he explained it, they look to build efficiency when things get overloaded, not just "throw more people at it." He said their goal is to hire as few additional people as possible and instead work toward figuring out what inefficiencies were being created that could be automated. I loved that.

Very little of what they needed to do to grow truly had to do with adding staff. If they looked to address every problem with "more people," then yes, absolutely. But adding more people doesn't automatically address the problem, and in many cases, it just adds more headcount to the same underlying issue.

Build Big Products, Not Companies

In the past decade at Startups.com, we've used this mantra to great effect. We want to build a platform that helps millions of Founders build and scale their ideas. But we don't necessarily want to have to build a massive staff to do it.

The goal, and the dream really, is to build a massive product that helps lots of people with the fewest, most tight-knit group of folks behind it. WhatsApp took on Facebook (and sold to them for $19 billion) with only 55 people. Mojang, the developer of Minecraft built one of the most popular video games of all time with a staff of less than 40 people (and sold for $2.5b).

We live in an era where we get to have our cake and eat it too. We can start small, stay small, and go big all at the same time. What matters is how we think about growth and scale from the onset and instead point our "growth cannons" toward product and revenue, not staff and office space!

In Case You Missed It

Adding Staff Isn't a Sign Of Success, Revenue Is Increasing your staff does not necessarily mean growth, but it is a deliberate liability.

How Much Should I Be Working? (podcast). Wil and Ryan take a deep dive into the benefits of thinking quality and not quantity when it comes to your weekly punch card.

We Need a Strict Definition of Personal Success Every moment we spend pursuing an undefined goal is a complete waste of time — especially personal goals.

Find this article helpful?

This is just a small sample! Register to unlock our in-depth courses, hundreds of video courses, and a library of playbooks and articles to grow your startup fast. Let us Let us show you!

Submission confirms agreement to our Terms of Service and Privacy Policy.

Already a member? Login

No comments yet.

Register to join the discussion.

Already a member? Login

Create Free Account