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E10: Why I 'Fired' 9 People and Made More Money (The Small Team Advantage)
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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:
- Founder takes new tasks first - test with AI and existing team before hiring
- Use contractors over employees for non-core work
- Apply the "keep one person" test - who would you fight to retain?
- 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.
New episodes Monday/Wednesday/Friday at 9am EST. Real founder lessons, not startup theater.
Daily thoughts: @TheGeorgePu on Twitter/X
Full episodes: founderreality.com
Email: [email protected]
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