Team dynamics and growth in product development involve distributing team members across different product areas to enhance focus and efficiency initially with a smaller team. A small team benefits from better communication, minimized errors, and reduced need for formal processes and testing due to everyone's awareness of activities. As the team and code base grow, challenges like increased complexity, reduced awareness of coupling, and regression issues arise, leading to the necessity of robust test suites over time. Starting with a smaller team on a new product helps avoid building unnecessary features, reducing complexity, and preventing the creation of code that adds no value. Slowly scaling the team based on necessity and pain points is seen as a beneficial strategy in building new products.

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