Money does not make a great product
Expertise and dedication do.
In a world where money is (almost) the sole quantifier of someone's importance and value, it seems fair to believe that the more money you throw at a problem, the better the solution is.
The thinking generally goes like this: if you spend more money, you will get a better outcome. If you are starting a company and developing a product, hire more engineers and designers! And don’t forget to grow a marketing department! More means better, right?
We all know this thinking goes nowhere. We all noticed that this new amazing car did not solve our problems and did not attract the partner we dreamed of. How many rich people die alone, like an old man full of regrets? Money never solved their problems.
I would argue that the same thinking goes with building companies and products. Throwing more money into a problem does not help make a great product. It may sound counter-productive, but pouring more money into product development makes you less efficient and makes you lose your potential edge.
Take the case of Slack and Discord. As of January 2021, Slack has 2500+ employees and about 18 million active users in 2020. Compare it with Discord which supports 150M users with 750 employees. Saying differently, Discord supports about eight times the number of users with more than three times fewer employees. Slack lost itself with a bloated product and an aging tech stack (PHP/MySQL) they never modernized and was the cause of many outages (there is even a dedicated section on Wikipedia for Slack outages).
Take the case of Instagram before its acquisition by Facebook in 2012: the social media website had 27M users with 13 employees. Without any revenue, the startup sold to Facebook for $1B on April 9, 2012.
Take the case of the Gas App. The team is composed of four persons and managed to create a social media app for teens that got viral in a few weeks and made $7M of revenue in 3 months. Gas has a team of straight shooters going for the gold.
And finally, take the example of Twitter: the company grew from 350 employees in 2011 to 7500 in 2021 to support the same product (e.g., sending short messages online) while having very few improvements over time (e.g. Spaces in 2020 when Twitter felt threatened by Clubhouse). Growing the number of employees by more than 20 times did not lead to a better outcome. For sure, you need to hire to support the product growth (for example, investment in infrastructure), but look at the chart above and ask yourself: “Did Twitter become x times better in 10 years?”. We all know the answer.
A great product is built by a small team of experts in a given domain that dedicate their time to solving a problem.
Building a great product requires a dedicated SWAT team ready to stay up all night, not a group of amateur poachers that go into the wilderness for the fun of drinking with friends and maybe hit a rabbit between two beers.
You need both:
expertise: without it, your team will never shoot in the bullseye and deliver precisely what is required. They may do something good but what you need is great.
dedication: you need a team that relentlessly works on a problem until it’s fixed.
I believe that dedication is even more important than expertise. You can learn a domain and get good at it pretty quickly. But you can never teach strong work ethics to anyone: you have it, or you do not. And many do not have it.
Some people argue that hiring a dedicated team is impossible and that engineers/developers prioritize work-life balance and do not want to work late or during the weekend. As an engineer myself, I strongly disagree with this statement and interestingly, I noticed that people that made such a comment were not engineers or had never built a successful company.
Hiring more people creates communication channels (see diagram below). Having more people on board occupies more mental space for each contributor. Adding more good people prevents great people from shipping. Adding an amateur poacher to a SWAT team only jeopardizes the mission's success.
With the current economic climate, great teams will prevail. Small, capital-efficient teams focusing on shipping simple and great products and solving customers’ problems will be the winners of the coming years.