Why Your Business Breaks Every Time It Triples (And What to Do Before It Does)
The Monday Morning Everything-Is-Wrong Meeting
Claire runs a marketing agency in Melbourne. Three years ago, it was just her and two contractors working out of a shared office in Fitzroy. Communication was a WhatsApp group. Invoicing was a spreadsheet. Projects lived in her head and a few Trello boards. It worked. Not perfectly, but well enough.
Then she hired. Then she hired again. By the time she had eleven people on payroll, the WhatsApp group had 4,000 unread messages, three clients had been invoiced twice, and her best senior designer had quit because — and this was the exact phrase he used — "nobody knows what anyone else is doing."
Claire hadn't done anything wrong. She'd just hit a wall that almost every growing business hits, at almost exactly the same moment, for reasons that are more predictable than most founders realise.
The Rule That Explains Everything
In the mid-2000s, Hiroshi Mikitani — founder of Rakuten, now one of the largest e-commerce companies in the world — observed something consistent across his own company's growth and the growth of businesses he'd studied: organisations break at predictable intervals. Not randomly. Not because of bad luck or bad management. Predictably.
The breaking points, Mikitani noted, correspond roughly to triplings in headcount: 1, 3, 10, 30, 100, 300, 1,000 employees.
Phil Libin, co-founder of Evernote, heard this from Mikitani directly and called it "one of the most actionable pieces of advice I've gotten." Tim Ferriss documented it in his 2016 book *Tools of Titans*, where Libin elaborated: many CEOs "blow right through these triplings without even realising it" — and that's precisely why the damage is so severe. The break isn't a sudden catastrophe. It's a slow degradation that you only recognise in hindsight, usually after a client complaint, a staff departure, or a set of financials that make no sense.
The rule applies to everything. Payroll. Meeting scheduling. How decisions get made. How money gets tracked. How people communicate. The hierarchy. The tools. The hiring process. What worked at three people — the informal, everyone-knows-everything model — physically cannot work at ten. What holds together at thirty begins to fracture at one hundred, when it becomes impossible to have a personal relationship with every colleague, and the company has to rely on systems and culture rather than individual trust.
Claire's agency hit the 3→10 wall. She just didn't know that's what it was called.
What Actually Breaks (And When)
Let's be specific, because the rule is only useful if you can see it coming.
At 3 people, most businesses run on informal communication and the founder's memory. There are no real processes because the founder *is* the process. This works fine. Everyone knows what everyone else is doing because you can see them.
At 10 people, the founder becomes a bottleneck. Every decision routes through one person. Informal communication breaks down because there are now 45 possible two-way communication channels between ten people, compared to three between three people. The flat structure that felt collaborative at three people now feels chaotic. Middle management — or at least clear ownership of functions — becomes necessary. Libin specifically noted that this 8–12 person range is where flat organisations must introduce structure, not because the founder wants hierarchy, but because the alternative is paralysis.
At 30 people, coordination becomes the primary challenge. You can no longer hold the whole business in your head. Projects touch multiple teams. Financial visibility requires actual reporting rather than a glance at the bank account. The founder who was across every client relationship now has to trust others to manage those relationships — which requires documented processes, not just institutional knowledge.
At 100 people, personal relationships can no longer carry the culture. You cannot know everyone. Decisions that used to take a ten-minute conversation now require meetings, sign-offs, and documentation. The tools that were "good enough" at thirty are now actively causing problems at one hundred.
Each of these transitions is painful. But here's the thing: the pain is optional. The transition isn't.
The Admin Balloon
There's a pattern worth naming here. In a healthy business, a founder's time divides roughly like this: about half on the actual work — the craft, the thing the business exists to deliver — about thirty percent on finding and winning new clients, and about twenty percent on administration. Invoicing, reporting, reconciling, scheduling, compliance.
That twenty percent is manageable. It's the cost of running a business.
But when systems break at each tripling, it's almost always the admin that balloons first. The craft doesn't disappear — clients still need their work. Business development slows, because the founder is distracted. And administration expands to fill the gap: manual data entry because two systems don't talk to each other, re-doing invoices because the old process can't handle the new volume, running reports by hand because the reporting tool doesn't connect to the project tool which doesn't connect to the finance tool.
Thirty percent admin. Then fifty. Then seventy.
At seventy percent admin, the business is in serious trouble. The craft is suffering. New clients aren't being chased. The founder is exhausted and doing work that a decent system should be doing automatically. This is the death spiral — and it accelerates at every tripling, because each new scale requires more coordination, more reporting, more process, and the fragmented tools that were barely coping before are now genuinely failing.
Claire knew this feeling. By the time she had eleven people, she was spending her Sundays reconciling timesheets and chasing invoices. She hadn't taken a new client call in six weeks.
The Fragmented Tool Stack Problem
Here's where the Rule of 3 and 10 gets compounded for most modern businesses: the typical SME doesn't have one system. It has twenty.
Project management in Asana. Client records in HubSpot. Time tracking in Harvest. Invoicing in Xero. Team chat in Slack. Documents in Google Drive. Equipment tracked in a spreadsheet. Reports built manually in Excel every month. And somewhere in the middle, a Zapier workflow that someone set up eighteen months ago and nobody fully understands anymore.
At three people, this works. Each person knows which tool to open for which task. The integrations are simple enough. The data is small enough that inconsistencies get caught.
At ten people, the cracks appear. A new hire updates a client's phone number in HubSpot but not in Xero. A project gets marked complete in Asana but the invoice never goes out because nobody connected those two things. The Zapier workflow breaks and nobody notices for three weeks because the error emails were going to an old address.
At thirty people, the tool stack becomes a full-time job to maintain. Someone has to own each integration. Someone has to train new hires on eleven different systems. Someone has to reconcile the data discrepancies that emerge when eleven systems each have their own version of the truth.
Every tripling doesn't just stress your organisation — it multiplies the stress across every tool in your stack. If you have twenty tools, you have twenty systems that each need to survive the transition. The odds are not in your favour.
Three Businesses, Three Breaking Points
The trades company. Jake runs a plumbing business in Brisbane. At two people — him and one apprentice — he managed everything from his phone. At seven, he had three vans on the road, equipment he couldn't always locate, and a part-time bookkeeper who was spending half her time reconciling job costs because the job management app didn't talk to Xero properly. He was quoting jobs without knowing whether the last three had been profitable. He hit the 3→10 wall and didn't see it coming.
The SaaS startup. A software company in Sydney grew from eight to thirty-two people in fourteen months after a funding round. At eight, the founders knew every customer personally. At thirty-two, customer success was a team of four, sales was a team of six, and nobody had a clear picture of which customers were at risk of churning because the CRM, the support tool, and the billing system each had different data. The 10→30 wall hit them during their fastest growth period — the worst possible time to be rebuilding systems.
The physio clinic. A physiotherapy practice in Perth expanded from one practitioner to twelve over four years. At three practitioners, the owner scheduled everything herself. At twelve, scheduling was a nightmare, equipment maintenance was tracked on a whiteboard that was frequently wrong, and the end-of-month financial reports took three days to produce because the practice management software didn't connect to anything else. The 3→10 wall, again.
Different industries. Same wall. Same timing.
Surviving the Tripling
Phil Libin's observation that CEOs "blow right through these triplings without even realising it" contains the key insight: awareness is the first defence. If you know the wall is coming, you can prepare for it before you hit it.
Practically, that means a few things.
Build for the next scale, not the current one. When you're at five people and things are running smoothly, that's the moment to ask: what breaks at fifteen? Not because you need to solve every problem now, but because the decisions you make at five — which tools you adopt, which processes you document, which systems you invest in — will either help or hurt you when you triple.
Reduce the number of systems that need to survive each transition. Every tool you add to your stack is another system that has to scale with you. Every integration is a potential failure point. The businesses that navigate triplings most cleanly tend to be the ones that consolidated early — one system for projects, clients, finances, and communication, rather than a different app for each.
Document processes before you need to. At three people, processes live in heads. At ten, that's a liability. The founder who documents how a job gets quoted, how a client gets onboarded, how an invoice gets raised — before they desperately need that documentation — is the founder who can actually hand those tasks to someone else without a month of chaos.
Watch the admin percentage. If you're spending more than twenty-five percent of your week on administration — not delivering work, not finding clients, but running the business operationally — that's a signal. The systems aren't keeping up. The tripling is already happening and the admin is ballooning to fill the gap.
One System That Grows With You
This is where the architecture of your tools matters more than most founders realise.
A platform like Opus is built on a single database. Projects, clients, finances, timesheets, team communication, equipment — they all share one data model. When you update a client's details, it updates everywhere, not because an integration pushed the change across eleven systems, but because there was only ever one record. At three people, that feels like a nice feature. At thirty, it's the difference between a business that scales and one that spends every Monday morning reconciling discrepancies.
The free tier handles up to five users and three projects — enough to get the foundation right before you need it. The point isn't to over-engineer a small business. The point is to choose a foundation that won't need to be replaced when you hit the next wall.
The businesses that survive each tripling aren't the ones with the most tools. They're the ones who made a decision early about what their operating system would be — and then grew into it, rather than outgrowing it.
The Break Is Coming. The Question Is Whether You're Ready.
Claire eventually rebuilt. New systems, clearer processes, a platform that connected her projects to her finances to her team. It took four months and cost her two more staff members who left during the transition. She'll tell you the rebuild was worth it. She'll also tell you she wishes she'd done it at six people instead of eleven.
The Rule of 3 and 10 isn't a warning about failure. It's a map. Mikitani observed it, Libin spread it, Ferriss documented it — and the underlying truth is simple: every system has a scale at which it stops working, and for most businesses, those scales arrive in roughly predictable triplings.
You don't have to be surprised by the wall. You just have to see it coming far enough in advance to build the door before you need it.
If you're approaching a tripling — or already feeling the friction of one — it's worth taking an honest look at how your current tools will hold up at three times the load. [Opus offers a free tier to start](https://opus.net.au) and a pricing structure that scales with your headcount, so the foundation you build today doesn't need to be torn down tomorrow.