Today, I’d like to share some resources to help you build a capital efficient business.

I referenced this thread in the newsletter, but I’d like to share the full thing here. Jason Lemkin offers a great strategy for early stage startups — “something has to be cheap.” These are actionable insights that will help you achieve capital efficiency. Check out the full thread here:

Jason ✨Be Kind✨ Lemkin  @jasonlk

If you have to “get profitable” in SaaS, how do you do it? There’s a simple but hard-to-achieve answer: “Something” has to be cheap. Be it engineering, or marketing, or sales. One of them. Just “doing PLG” isn’t the answer A few examples: 🔽🔽🔽

This podcast from ProfitWell with John Jahnke of Tackle gives a number of insights into the day-to-day of launching a capital efficient business. His mindset of “how can we do it for less” is the perfect one for founders working toward capital efficiency. The “minimum viable team” approach is also one to remember as you approach hiring. Listen to the full episode for a good example of a founder focused on capital efficiency.

Tasso Roumeliotis’ story of building Location Labs is another example of the power of capital efficiency. His laser focus on burn rate allowed him to have massive success amid an economic downturn, but I strongly recommend that you adopt this mindset in all markets. Of course, context matters. These strategies are designed for early-stage startups. For example, I prefer frameworks and ratios over budgets for an early-stage company. But large companies can’t function without one.

It's a human instinct to grow a team. It makes people feel more powerful and secure and valued. But is it really essential to bring someone on? Is it worth the enormous costs associated with doing that? Will something fail unless we hire someone?

As Jason Lemkin said in the above Twitter thread, Atlassian is a classic story of successful capital efficiency. Deep dive into their story here to learn from how they made it work.

To a lot of SaaS companies, Atlassian looks like the “end goal.” They’ve grown into a giant, public, global company with a complex and integrated suite of products for many different verticals.
But Atlassian understands that success is a continuum. They’re burning brightly, but unless they can keep up their growth going and maintain a stronghold over their markets, they’ll flare out.

I hope these resources motivate you to stay on track with capital efficiency. You can always ask questions and let me know your thoughts here, on Twitter, or on Instagram.

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