Such a timely and important article with great tips from the driver's seat, Chris. B2C companies backed by VCs wanted to grow at all costs pre-pandemic, and honestly in India it's still pretty much the same playbook. But B2B companies got to be efficient—probably even more so in the current market. Thanks for putting this together!
My pleasure. Key is finding a wave 🌊 worth surfing. A hard pressing need that you can tap into with a killer product and a simple GTM. Then the hard part starts 📈
At Notion we're not hot on the horizontal apps as the defensibility is close to zero and feels like infrastructure players will take it BUT we're VCs so we're wrong most of the time 😂
The best founders get really clever about making every dollar count. They build companies that can grow on their own terms without burning through cash. That's what gives them peace of mind when the economy turns sour.
The shift from growth at all costs to efficient growth is so importnt for today's founders. What really stands out is how you frame efficiency as knowing which dollars shift trajectory versus background noise. The operting rhythm of acquire activate expand is a simple framework that makes these abstract metrics actionable. The case studies showing Burn Multiple improvements are especially helpful for founders trying to navigate this enviroment.
Have seen burn rates all over the map with successful companies but nothing works without a recurring revenue source. It could be 100 cheap things or one high ticket flagship. Lovable doing something meteoric by the way. We'll see if they can keep up that pace.
Love love love this! As someone who is always working with early stage founders who have very limited funding, it’s so key to keep the efficiencies up. It’s crazy the inefficiencies I’ve seen when stepping into a company that’s been at it for a bit. There are so many low hanging fruits that are hard for those in the weeds to see!
Curious, in addition to the very valid perspective you offer in the article, how do you see the shift toward efficient use of capital as indicative of the broader maturation of the VC market?
3 things - 1. In portfolio - FTE growth will slow whilst revenue expands. Ie diverging - finally. I've waited my whole career for this moment 2. Triple Triple Double Double Double is now Quadruple Quadruple Triple Triple Triple - growth rates have stepped up significantly in the winners and distorting selection 3. AI Native companies are receiving 60% plus of all the investment leaving the other models to fight over a small slice of the piece - this is v challenging for others.
We're seeing our latest cohort of investments are 30% bigger in revenue at the same stage and 30% smaller in team size (the team is more expensive - so not 30% in $ terms). But as we'd expect revenue per employee is widening quickly
"Efficiency is not about spending less. It is about knowing which dollars actually shift the trajectory and which dollars are just background noise." That line right there is the crux of the whole shift.
This is such a solid breakdown. Thank you! Till today, I am still surprised to see how many Series A founders still haven’t internalized capital efficiency. With more conversations and insights like this, hopefully that curve bends in the right direction. 🤓🖤
A major misconception exists. All validated commercial enterprises have to kick off cash (be efficient) at some part of the lifecycle unless they're being acquired for the technology or they’ll be sold cheaply (because a burn needs to be financed) or worse they flame out & die. Finding that optimal balance btw high growth & efficiency is key ✨ Thanks for sharing your thoughts
Such a timely and important article with great tips from the driver's seat, Chris. B2C companies backed by VCs wanted to grow at all costs pre-pandemic, and honestly in India it's still pretty much the same playbook. But B2B companies got to be efficient—probably even more so in the current market. Thanks for putting this together!
My pleasure. Key is finding a wave 🌊 worth surfing. A hard pressing need that you can tap into with a killer product and a simple GTM. Then the hard part starts 📈
Lovable is unreliable, doesn’t remember edits and certainly doesn’t live up to the hype. It is a waste of money. I tried it out, another AI rip off.
I’m pretty curious how this is going to evolve now with Google stepping up with anti-gravity I just canceled my lovable account yesterday
At Notion we're not hot on the horizontal apps as the defensibility is close to zero and feels like infrastructure players will take it BUT we're VCs so we're wrong most of the time 😂
Loved this piece. What struck me is how much “efficient growth” mirrors what I see in senior teams through the 5 Voices lens.
When a company scales fast, pressure usually squeezes people back into their default voice.
Guardians tighten the reins.
Pioneers push harder.
Connectors try to keep everyone together.
Creatives raise questions no one feels ready for.
Nurturers carry the emotional load in silence.
If a founder doesn’t notice these shifts early, the culture bends long before the numbers do.
The best founders get really clever about making every dollar count. They build companies that can grow on their own terms without burning through cash. That's what gives them peace of mind when the economy turns sour.
Every dollar has a return way beyond its size 👏
The shift from growth at all costs to efficient growth is so importnt for today's founders. What really stands out is how you frame efficiency as knowing which dollars shift trajectory versus background noise. The operting rhythm of acquire activate expand is a simple framework that makes these abstract metrics actionable. The case studies showing Burn Multiple improvements are especially helpful for founders trying to navigate this enviroment.
Thanks for the feedback - really appreciated 🌞
Have seen burn rates all over the map with successful companies but nothing works without a recurring revenue source. It could be 100 cheap things or one high ticket flagship. Lovable doing something meteoric by the way. We'll see if they can keep up that pace.
My biggest burn is about $4m per month. But adding $5m. It's not the size of the burn it's the return on it that counts & the LTV/DRR 🌟
yeah, hope you saw that typo 😅
Love love love this! As someone who is always working with early stage founders who have very limited funding, it’s so key to keep the efficiencies up. It’s crazy the inefficiencies I’ve seen when stepping into a company that’s been at it for a bit. There are so many low hanging fruits that are hard for those in the weeds to see!
Those “raised more than $100m and sold & retained less than $10m ARR” - the wrong type of 10% companies 😳
Curious, in addition to the very valid perspective you offer in the article, how do you see the shift toward efficient use of capital as indicative of the broader maturation of the VC market?
i.e…
3 things - 1. In portfolio - FTE growth will slow whilst revenue expands. Ie diverging - finally. I've waited my whole career for this moment 2. Triple Triple Double Double Double is now Quadruple Quadruple Triple Triple Triple - growth rates have stepped up significantly in the winners and distorting selection 3. AI Native companies are receiving 60% plus of all the investment leaving the other models to fight over a small slice of the piece - this is v challenging for others.
Building faster with AI is the thing that I'm hearing the most from founders right now.
AI coding is still not perfect yet, but it's definitely getting better with each iteration.
We're seeing our latest cohort of investments are 30% bigger in revenue at the same stage and 30% smaller in team size (the team is more expensive - so not 30% in $ terms). But as we'd expect revenue per employee is widening quickly
a phenomenal deep dive..
"Efficiency is not about spending less. It is about knowing which dollars actually shift the trajectory and which dollars are just background noise." That line right there is the crux of the whole shift.
Totally, totally correct 💯 nailed it
can’t get enough of these founder deep-dives, chris
Thanks Burak. Great to get positive feedback. We learn quite a bit simply in the research! 🌟
Financial literacy is fundamental for founders in early stage and raises confidence with investors.
As a CFO I never fail to notice how confidence is built early with systems that track performance and measure business resilience.
💯 may founders and teams don't understand their numbers and chase the wrong KPIs
This is where the education you bring is so essential. Too many founders feel intimidated by finance and they shouldn't be.
This is such a solid breakdown. Thank you! Till today, I am still surprised to see how many Series A founders still haven’t internalized capital efficiency. With more conversations and insights like this, hopefully that curve bends in the right direction. 🤓🖤
A major misconception exists. All validated commercial enterprises have to kick off cash (be efficient) at some part of the lifecycle unless they're being acquired for the technology or they’ll be sold cheaply (because a burn needs to be financed) or worse they flame out & die. Finding that optimal balance btw high growth & efficiency is key ✨ Thanks for sharing your thoughts