Amazon often spoke of how two-pizza meetings were more efficient, and Shopify also seems to have its take on the advantages of smaller teams.
Tobi Lutke, CEO of Shopify, recently shared the e-commerce giant’s philosophy on team composition, revealing a counterintuitive insight: while the ideal team size might actually be one person, the company has settled on five as its magic number. The statement reflects Shopify’s broader cultural commitment to lean operations and productivity optimization—a company that has previously canceled meetings with more than two people and where the CEO himself has tracked his own keystrokes and screenshots for over a decade.
“Shopify loves the five-person team,” Lutke explained. “We increase to eight sometimes, but we think the best team size is one, because a single person can do things that are impossible to do for teams and hit high notes that are unreachable. Most projects worth doing need to be done in teams. Then there’s a magic number at five.”
Lutke drew a parallel to military organizational structures, noting that they’ve independently arrived at similar conclusions through rigorous testing. “It’s sort of what the military ends up figuring out. They test these things and come to the same conclusions. You can sort of temporarily go up, but then at some point you have to split teams and parcel out the tasks. Each of these additions is like a 10x loss of productivity.”
The implications of this team size philosophy become striking when considering Shopify’s scale. “Shopify’s R&D team is about three and a half thousand people,” Lutke revealed. “It’s really lots and lots and lots of small teams.”
This structural approach aligns with Shopify’s unorthodox management practices. The company famously operates without KPIs or OKRs, trusting small teams to maintain focus without traditional metrics. More recently, Shopify has even begun requiring teams requesting additional headcount to explain why their tasks cannot be accomplished by AI instead—a forward-looking twist on the small-team philosophy.
Lutke’s observation about the “10x loss of productivity” with each team expansion echoes research in organizational psychology around communication overhead and coordination costs. As teams grow arithmetically, the number of communication pathways grows exponentially, creating the exact drag Lutke describes. By maintaining a hard ceiling of five to eight people, Shopify appears to be optimizing for speed and autonomy over the perceived benefits of larger, more resource-rich teams. In an era where many tech companies are reconsidering their organizational structures post-pandemic, Shopify’s disciplined approach to team size offers a data point worth considering: sometimes the constraint itself becomes the competitive advantage.