We've been asked twice this year to take outside money and grow PulseCode. We turned both down. The reasoning is unromantic and worth writing down — partly so we can re-read it the next time someone offers, partly because most studios that quietly stay small don't bother to explain.
The numbers that anchor it
Four senior engineers, working four days a week on client projects, billable at our actual rate, gives us a comfortable annual revenue with margin to spare. We choose 4 days because the fifth is for internal R&D, blog posts, and reading. Nobody chases utilisation.
If we hired two more senior engineers, our revenue would roughly double. Our margin would not. Senior engineers cost real money. London office space costs more. An office manager becomes necessary. So does a finance person. So do tools at the team-of-six tier. The extra revenue funds a less interesting business, not a more profitable one.
We've run the spreadsheet several times. The team-of-six version of PulseCode makes slightly less per-partner than the team-of-four version, while requiring the partners to spend ~25% of their time managing instead of building. We have not found a path through that valley that we like.
What "scaling" would force us to give up
We currently:
- Read every brief personally. That doesn't scale beyond ~4 founders if you want each to have a relationship with each project. We could automate the front door, but the conversion rate of "founder reads your brief and emails you back" is meaningfully higher than "intake form routes you to an account manager".
- Write the code we sell. Once the partners stop writing the code, the studio's quality is downstream of how well we hire — not how well we engineer. Most studios don't hire better than they engineer.
- Decline 70% of inbound. A team of 12 has to take more of what comes in to stay full. That changes who you say yes to. It also changes who refers you.
These are the things clients actually pay us for. Scaling away from them is a strange way to grow a service business.
What we ask before saying yes to a third partner
We're not religious about staying four. We've sketched a plausible team-of-five for a specific kind of client (regulated, multi-quarter projects). The bar before we'd grow:
- Steady demand for ≥ 9 months in a niche we want to keep doing — not just one big client.
- A specific person we already trust and want to work with daily — not a generic hire.
- A contract structure that absorbs them at a near-partner level — they own client work, not assist on it.
We've never had all three at the same time. When we have, we'll grow. Until then, the team-of-four version of PulseCode is the more interesting business.
What this is not an argument for
This is not an argument against ambition. We work with companies that are aggressively growing — that's most of our portfolio. It's an argument that the right shape of our business is small, partner-owned, and senior-only, because that's what the work we want to do requires. Other studios should have other shapes. Most clients shouldn't even notice we're four people.
If you're choosing how to shape your own studio, the trap to avoid is the "automatic growth" assumption. Growth is a choice. So is staying.