8 Employees and a Cat: Why Obsidian Beats Note Apps With 100 Engineers

A few weeks ago, a Reddit post with over 2,400 upvotes asked a question that stopped me mid-scroll: "Why does Obsidian have 8 employees and 1 cat while other note apps have 100+ employees?"

It's a fair question. And the answer explains something I've been thinking about for years.

Wait, They Only Have 8 People?

Obsidian, the note-taking app that developers and writers swear by, has roughly 8 full-time employees. And yes, an office cat. That's it.

With that tiny team, they've built an app with 5 million+ downloads, over 2,500 community plugins, and an estimated $25 million in annual recurring revenue. Their valuation sits around $350 million. Zero external funding. Fully bootstrapped.

Founded in 2020 by Shida Li and Erica Xu, two University of Waterloo grads who previously built Dynalist, Obsidian runs on revenue from Sync ($4/month) and Publish ($8/month). No investor board meetings. No growth targets from people who've never used the product.

Their CEO, Steph Ango, has said something that stuck with me: "Almost all the big PKM apps have raised millions. The problem is it misaligns incentives for the user."

As someone who refuses to scale my own one-person agency, that hit different.

The Math That Explains Everything

There's a concept from 1975 called Brooks's Law: "Adding manpower to a late software project makes it later." Nearly 50 years old, and still one of the most ignored truths in tech.

Here's why. The number of communication channels in a team follows a simple formula: n(n-1)/2. A team of 3 has 3 channels. A team of 6 has 15. A team of 50? 1,225 communication channels.

Bain & Company found that every person you add beyond 7 in a decision group reduces effectiveness by roughly 10%. At 17 or more people, decisions stall entirely.

More people doesn't mean more output. It means more meetings, more alignment sessions, more Slack channels with 200 unread messages, more people who need to "be in the loop" before anything ships.

Obsidian reportedly doesn't even have meetings. Think about that for a second.

Notion Has Hundreds of Engineers. So Why Does It Feel Slower?

Let's compare. Notion has over 100 million active users, serves 70% of the Fortune 500, employs hundreds of people, and carries a valuation north of $10 billion. By every traditional metric, it's the bigger success story.

But ask developers which one feels faster, and the answer is almost always Obsidian.

The reason is architectural. Obsidian is local-first. Your notes are plain Markdown files stored on your own machine. The app reads them directly. No server round-trips, no loading spinners, no "syncing your workspace" messages.

Notion is cloud-first. Every action hits a server. That architecture choice, made early on, means Notion needs a huge engineering team just to keep the lights on. Infrastructure, reliability, security, compliance, latency optimization. All of that takes people.

Obsidian pushed that complexity to the user's machine. Fewer servers, fewer engineers, fewer problems.

The irony is thick: the decision to stay simple early on is what lets them stay small forever. It's the same reason I chose to self-host most of my tools instead of paying for a dozen cloud services. The upfront choice determines the ongoing cost.

They're Not the Only Ones

Obsidian isn't an anomaly. This pattern shows up everywhere if you look for it.

Stardew Valley was built by one person. Eric "ConcernedApe" Barone spent 4.5 years working 10-hour days, doing all the design, programming, art, music, and writing himself. The result: over 30 million copies sold, more than $130 million in revenue, and the highest-rated game on Steam. One guy beat AAA studios with hundred-person teams.

Pinboard, the bookmarking service, was run by a single person for years. It outlasted every VC-funded competitor, including Delicious, which had millions in backing.

37signals (the team behind Basecamp and Hey) has been bootstrapped since 1999. They built Ruby on Rails with a tiny team. Over 20 million users. No investors telling them to pivot to AI or add a social feed.

The pattern is always the same: a small team with a clear vision and no investor pressure ships focused products. They don't build features to justify headcount. They build features because users need them.

I built WunderType because I was tired of fixing my own typos. One person, one problem, one app. It's not Stardew Valley. But the principle is identical.

The VC Growth Trap

Here's where it gets uncomfortable for a lot of startups.

According to Startup Genome, 70% of startups scale prematurely. And 74% of high-growth internet startups fail specifically because of premature scaling. The number that really hurts: 93% of prematurely scaled companies never break $100k in monthly recurring revenue.

The cycle looks the same every time. Raise money. Hire fast. Build features nobody asked for. Chase metrics that impress investors instead of users. Burn through the runway. Raise more money. Repeat until you either IPO or implode.

Obsidian skipped that entire loop. Their only "boss" is the users who pay $4 a month for Sync. No investor exit timeline. No board pushing them to add AI features to every screen. No growth-at-all-costs pressure.

I've watched this play out in my own industry too. Agencies that raise money, hire 30 people in a year, then spend more time managing the team than doing the work. Meanwhile their SaaS ideas burn cash while a solo consultant with a laptop outdelivers them.

When You Actually Need a Big Team

I don't want to oversimplify this. Small isn't always better.

You need scale for regulated industries where compliance requires dedicated teams. For hardware plus software integration where the complexity is inherent, not organizational. For 24/7 enterprise support across time zones. For global infrastructure like AWS or Cloudflare, where the product literally is the scale.

The question isn't "how many people do you have?" It's "does every person make the product better for users?" If you can't answer that clearly, you might be scaling for the wrong reasons.

AI tools are changing this equation too. A small team with good AI workflows can now do what took ten people three years ago. The force multiplier is real.

What This Means If You're Building Something

I run a one-person agency competing with shops of 20 to 50 people. Some weeks that feels insane. Most weeks it feels right.

The Obsidian model isn't about being small for the sake of being small. It's about being intentional. Every person you add brings communication overhead, alignment needs, and differing opinions about what matters. Sometimes that's valuable. Often it's just noise.

What I've learned, both from watching companies like Obsidian and from running my own operation with AI tools: the hard part was never building. The hard part is knowing what to build. And that doesn't get easier with more people. Sometimes it gets harder.

I'm not telling you to stay solo forever. I'm telling you to think twice before hiring because everyone says you should.

Eight people and a cat built one of the best note-taking apps on the planet. What's your excuse for needing fifty?

If you're building something and want a second opinion on whether you're overcomplicating it, let's talk.