Take a look at the number of employees Kozmo.com and govWorks.com had. Take a look at the funding that Pets.com had, all failures.
It isn’t the amount of people you have in a startup company that makes it successful. It also isn’t the nice office space or the amount of funding you have, it is more than just that. Overhead can create massive problems if you grow without the right plan, the right culture, the right vision, the right team.
The problem with true hyper-growth… It’s the problem like baking a cake in three minutes. You’re in the kitchen and you have sugar, flour, egg on the ceiling. What the hell are you doing?
Marc Andreessen at a Y Combinator talk, spoke about how startups are like baking a cake, you have to put the ingredients in at the right time and timing has to be just right, if any of it is mixed up then the cake will not come out right. Andreessen said at his early days at Netscape days they were hiring around 100 people per week.
It isn’t all the glitz, press and funding that creates success. What makes a company successful? Passion, a great dedicated team, execution, timing, bad or lack of competition, good idea. It is critical to have growth. That growth can be exponential user growth or sales. When the right company with all of these elements gets funding sometimes magic happens, it is hard work but the company grows like crazy.
Look at Apple, it had exponential sales in the early days, a lot of sales. Look at Instagram, it was exponential user growth, a lot of users. Or even CraigsList, they are a very small team, but everyone has heard of them. Growth is what creates a healthy company. If a company is to survive it needs growth.
When your first starting out you might hire a few people but keep making sales and users happy. Sales, support and growth are essential.
The right people in your company are what make it successful, people are everything, but counting the number of bodies in a startup doesn’t mean the company is successful, it is the quality and passion of the people who are there working day in and day out on the company that make a great company.
There’s nothing wrong with staying small. You can do big things with a small team.
~Jason Fried, 37signals founder
Great post Daniel!