Below Water Level

Growth can be achieved with small teams. But, small team size must become a leadership skin so it cannot be taken off when it feels inconvenient.

At Airbase, we worked very hard to organize teams for the smallest headcount. Containing the size of teams was easier when the company was younger when I joined in Jan 2019 as the 13th employee but it got increasingly hard over the next few years.

By the time Paylocity acquired Airbase in Oct 2024, headcount had grown approximately 26X to roughly 350. Starting some time in 2021, it seemed that team sizes were going only in one direction due to pressures of growth, higher demands coming from and expected of the technical architecture, rapidly expanding surface area of the product and rapid growth in company headcount. Despite that, we largely pulled off a structure and cadence that allowed us to release product at a high velocity, although the higher headcount did reduce speed relative to the early days.

Those who had been around since the early days, noticed that it took more and more energy from a team of middle managers to keep the system moving at a sufficiently high throughput. There were days we felt like we were running just to stay in the same spot on the product conveyor belt.

A strategy based on growth does not directly result in larger team sizes, although the natural human tendency is to grow team sizes too when there is abundance of investment all around.

The hard thing is to grow the business while keeping team sizes small. It is hard because all strategy is about choice. The difficulty is this. If one chooses keep team size small as a non-negotiable aspect of strategy, then all other decisions must realign and re-converge to support existence of small teams. Management system, incentives, promotion criteria, development plans…everything, must prevent creation of large team sizes.

Small teams create advantages that avoid a range of dysfunctions when delivering on strategy. Some times it is better to let small team structure determine strategy, instead of creating team structures to support a strategy. Small team is a starting point of strategy and not a result of other, seemingly more important “strategic” decisions taken by executives.