Scaling Your Business? You May Not Want to Hire More People Right Away — Here's Why.

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Within startups, especially tech startups, there’s long been this idea that if you’re not growing fast, you’re falling behind. Growth has always meant hiring more people as quickly as possible. But today, I see things a bit differently. Scaling a company doesn’t have to mean adding more people to the payroll. A small, tight-knit team can accomplish just as much, if not more, than a big one — especially if you’re smart about how you run things.

When I started my most recent company, Bread, we wanted to build something impactful without getting bogged down by the typical growing pains that come with rapid hiring. The big question we kept asking ourselves was: How do we make the most out of a small team?

What we found is that staying lean can actually be a huge advantage.

Why bigger isn’t always better

A lot of startups get caught up in the idea that more people equals more success. But I’ve seen firsthand how quickly that can backfire. The more people you have, the harder it becomes to communicate effectively, and making decisions starts to slow down. Before you know it, you have layers of management and it’s much harder to keep everyone on the same page.

In my experience, keeping the team small has allowed us to stay focused. We can make decisions faster, change direction when we need to and stay close to the work that really matters. We’re not trying to build a massive organization — we’re trying to build something that works well and does what it’s supposed to do.

The perks of keeping it small

There are a lot of upsides to sticking with a small team:

Quick on your feet: With fewer people involved, you can pivot quickly if something isn’t working or if a new opportunity pops up. If you run your company in short cycles — about six weeks — you’re always in a position to make adjustments without getting stuck in the weeds.
Communication flows easily: Without a ton of management layers, it’s easier to make sure everyone knows what’s going on. When your team is all on the same page, it makes everything you do more effective.
Creativity thrives: When you’re part of a small team, you often end up wearing multiple hats, which can lead to some pretty creative solutions. Focus on hiring people who are comfortable switching between tasks — whether it’s coding, designing or strategic thinking.
Less overhead: Automate your routine tasks so you can focus on the stuff that really matters, and so you don’t need a big admin team to keep the wheels turning.

It might seem counterintuitive but ultimately, having fewer people can allow you to accomplish more.

How to make a big impact with a small team

So, how do you scale a company without blowing up your headcount? One of the key strategies my team has employed is automation. By building our own tools to handle tasks like reporting and forecasting, we’ve significantly reduced the time spent on administrative work, allowing us to focus on the bigger picture.

The adoption of low-code and no-code platforms is also becoming increasingly popular. Coding automation tools like these allow small teams to build and deploy applications incredibly fast without needing to hire more engineers.

Making a big impact with a small team requires versatility in hiring. When I’m in hiring mode, I don’t just look for people who are good at one thing; I seek out individuals who can think strategically but aren’t afraid to roll up their sleeves and dive into the work. It’s important to have team members who are comfortable with both the big-picture thinking and the nitty-gritty details.

My co-founders and I have also learned to be selective about the projects we take on. With a small team, it’s impossible to do everything, so we focus on initiatives that align with our strengths and goals.

Small teams, big results

There are plenty of examples out there of small teams doing big things. WhatsApp, for instance, had only 55 employees when Facebook bought it for $19 billion. Or take Basecamp, which has kept its team at around 60 people while serving millions of users. You don’t need a massive workforce to make a huge impact.

For me, the small-team approach isn’t about staying small for the sake of it. It’s about staying lean and focused, so we can do our best work without getting bogged down in unnecessary complexity. I’ve found that when you have a small, dedicated team that works well together, you can accomplish a lot more than you might think.

The small team trend

After the rapid hiring and subsequent workforce reductions that many tech companies experienced in the last four years, I think more leaders are realizing that you don’t need a big team to succeed. It’s not about how many people you have; it’s about how effective those people are. And in a lot of cases, keeping it small might be the smartest way to grow.

As an early entrepreneur, don’t get too caught up in the idea that growth means hiring more people. Focus on building a team that works well together, stays flexible, and gets things done. In the end, it’s not about the size of your team — it’s about what that team can achieve.

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