How much documentation?

Working for a startup, there has been some pull back and forth on how much documentation is the right amount.
Over documentation is often a problem with large companies. So much process is required to get the most basic things done that it’s next to impossible to get anything out of the ordinary accomplished. This slows the pace of development and creativity. The company I work for is not a big company and there just aren’t enough resources to thouroughly document everything even if we wanted to. Even if we had the resources over documentation would be the beginning of a slow and painful death for the company.
The other end of the spectrum is complete seat of the pants no documentation. This is more often the case with a startup, there just isn’t time to write everything down. Why bother when you could be doing instead of writing about doing. This can lead to confusion and chaos though if there isn’t strong leadership to keep everyone moving in the same direction.
My theory on the matter I’ll call the “One Week Meeting Rule”. The requirement is that a group should be able to sit down and discuss plans for work and have everyone come to agreement. Then one week later sit down and test whether everyone still agrees on the same things. This isn’t about whether changes have been made and agreed to in the interim, but whether what everyone thought they had agreed to is still in sync after a set period of time. As people go about their business during the week and things are discussed, is everyone still moving in the same direction at the end of the week or is it more of a brownian motion effect?
The makeup of the group will have a very large impact in determining how much documentation is required. Without this simple little test it’s almost impossible for people to work together. If the basics can’t be agreed upon then documentation is required to cement what those agreements were and reinforce the decisions made.