"The work capacity of an organization scales, at most, linearly as new members are added. " WTF? This is a bad way to think about the 'division of labour'. One man cannot ever get over a 10 foot wall. Two men together can absolutely do it. 'Work' is not the measurement, 'productivity' is. Even the fleeting thinker, who works only 1 day a week, but shows up every day, may be absolutely critical to making things work.…
If the value of new people diminishes logarithmicly, or much more likely, at the square root of the number of people, you must tackle tasks that a smaller team could not. Otherwise you'll be out-competed by a handful of smaller competitors.
Yes, you can do things a smaller team couldn't do, but you don't really have a choice, if you want to survive.