Search beats nesting at any document count above 50. Most users hit 50 documents within a few months. Folders, the way Drive and Dropbox use them, become a graveyard of “Misc,” “Stuff,” “2023 stuff,” “old,” “really old.” The tree gets deeper. The documents get harder to find.
Tags are flat and cheap. You write the document, you tag it client-acme or q3-board or personal, and search-by-tag is the same speed as search-by-title. A document can have three tags. A folder can have one parent. The math favors tags.
We’ll ship folders eventually, because some users want the spatial metaphor more than the search results. But they’re not the default, and they’re not the way we think people should organize. The 25-doc free plan exists partly because that’s how many documents you can hold in your head without needing a tree.
Folders are coming. They’re just coming after we’re sure search is fast enough that nobody needs them.