The Diminishing Returns of Startup Growth

Why team building sucks ass.

Listen to my audio recording of this article on Umano

If you're like me, you love startups. But sometimes I ask myself why I love startups so much — I wonder why I didn't just take the corporate route. It sure would have been easier.

One of the things I like about startups is that you start out with small teams. In the early days it’s just you and your co-founder, maybe one other person or a few contractors. Things move at light speed. There is almost nothing hindering progress. It’s just so satisfying to simply get shit done.

But, if you're lucky, you get some traction and invariably you need to hire people. This is where Diminishing Returns comes to fuck you.

Here’s how it works.

When it’s just two people sitting across from each other you're both working at near 100% capacity. It feels damn good too.

When you bring on your first employee you now have to interact with them. You have meetings, calls, proposals, outlines, strategy sessions, more meetings and so on.

I'm not even factoring in the time it takes to get a new employee up to speed, that’s a total bone in and of itself.

Yes, your total combined output higher, but your individual output is reduced. Where I was working at 100% capacity, I’m not working at 95% and so is the other person.

With the first hire, it’s not that noticeable. But as you grow, the output reduction compounds and you progressively operate at lower and lower capacity.

It looks a little something like this:

It’s the nature of the beast I guess, and yes, the total output for your company is more, but the individual is less. And if you love producing as much as I do, it’s rather painful and eventually you want to just leave the whole thing for someone else to deal with — which is exactly what I end up doing.

Then I start all over again.