Thumbing through a copy of Revolutionizing IT: The Art of Using Information Technology Effectively, one thing was singled out as a core principle and repeated a couple of times:

A modest number of outstanding people are more valuable than a large number of average ones.

I ran into a former manager last night and we were discussing a programmer that we had worked with. We both agreed that this programmer was amazing — easily worth 3 or 4 average programmers. I’ve seen this proven out in several different instances.

Besides the talent issue, many tasks can’t be scaled simply by adding more people:

You can’t produce a baby in one month by getting nine women pregnant.
—Warren Buffett

Consider the game tug o’ war. There is only room for so many hands on the rope. Once you reach the max, adding more hands doesn’t do any good. That’s why it’s important to have the strongest players possible.

Adding people adds overhead and increases chaos. It requires extra coordination and communication efforts. Where is the point where your returns start to decrease when you factor in overhead?

Another factor involves the way we appear to be wired. It seems we tend to work better on creative endeavors in smaller groups:

…the smallest viable group size seems to be somewhere in the range of 5 to 9.

My experience so far supports the idea.