You are 100% right — for late stage startups where you would normally see 500 people.

At the Fast stage, the only viable promotion path is ship work that impacts the business or close deals that bring in revenue. The promotion levels game is something you play in larger organizations to engineer a rat race for people because it turns out they really like that. But no, a startup does not benefit from hierarchy quite the opposite in fact. That crap is all overhead it’s necessary as you grow but actually detrimental to your success.