When you have a clear vision of your product, you don't need a lot of people to execute. The only thing in my experience doesn't scale well is customer support and sales. So, an early start up could do a lot with a small number of employees.

Now, once you need to generate revenue, you will need to add people (a lot of them) for sales and support. It gets worse if the revenue model doesn't prove to work well, then you'll need to hire more to try out new things in the hope that you get to something before your funding runs out.