By far the best answer. There are other aspects of the observed effect, too. A small startup where the CTO can review all the code is also a startup where the

By far the best answer. There are other aspects of the observed effect, too. A small startup where the CTO can review all the code is also a startup where the CTO can be involved in all hiring. It's also small enough to not be perceived as a lucrative target for lawsuits, so underperforming employees can be fired much more easily. On a more macro level, most of the productivity of an organization comes from a minority of its members, and that majority of nonprductivity can really become appalling at large scale.