E10: Why I 'Fired' 9 People and Made More Money (The Small Team Advantage)

Founder Reality

I went from 14 employees down to 5 people two years ago. It was the best business decision I've ever made. We're more profitable, faster, and I actually enjoy work again.

The brutal reality of scaling too fast:

• 14 people = 7 hours monthly just doing one-on-ones
• Communication paths explode exponentially with team size
• You start "finding tasks" for people instead of having natural work flow
• I failed the Sunday Night Test - dreading Monday mornings because of management overhead
• Multiple developer groups created shadow societies within the company

What I learned the hard way:

• Adding people doesn't multiply output - it multiplies complexity
• When you need performance reviews to know what people are doing, you're already too big
• The moment you're allocating tasks instead of having organic work flow, you're 1000% on the wrong track
• Cash position broke with 14 people - couldn't make payroll

My small team framework now:

1. Founder takes new tasks first - test with AI and existing team before hiring
2. Use contractors over employees for non-core work
3. Apply the "keep one person" test - who would you fight to retain?
4. Sunday Night Test - if you dread Monday, something's wrong

The 5-person reality:

• No performance reviews needed (I know what everyone's building)
• No daily standups (we just hop on Slack when needed)
• Faster decision-making, better culture, actual family feel
• AI handles what used to require hiring 3-4 additional people

Red flags you're hiring too fast: Time drainage from management processes, failing the Sunday Night Test, having to create work for people, losing the startup culture feeling.

Bottom line: Your competitive advantage isn't team size - it's team efficiency. Sometimes fewer people doing more is exactly what your startup needs.

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