Growth vs Efficiency: The Winning Strategy

The public markets are demanding that everybody be be more efficient. But it's not enough. So profitable. Hooray. No one cares. No one cares. Yes, Shopify. We talked about them at accelerating it at 12 billion they are getting more efficient. They're getting more efficient because they're growing 30 and they're increasing spend in the teens like sales and marketing. I just wrote it up on SAS Run five interesting learning, sales and marketing, product gna. They're all growing in the teens. They are hiring. They are spending more, but in the teens while they grow 30%. So if you hire but at a rate lower than your growth rate, you will get more efficient and more profitable. Public markets want that. Monday blew out the quarter. They're more, much more efficient than they used to be. Yes, but it's not the end goal. It's necessary but not sufficient. And if you look, I inverted sorted the Bessemer cloud index public companies by the lowest revenue multiples. If you look at that chart, EV divided by annualized revenue, that's the lowest multiples. Isn't perfect but it gets you a sense. Some of these folks are super lean and efficient. Who cares? 4 ring central trading at 1.8x revenues. It's profitable, right? Patriot Duty. We talked about 3.4x bill.com who I love one of the best. But still forex Zoom. Massively profitable. Zoom's at over 4 billion in revenue. Half of it is free cash flow. Zoom is generating 2 billion of cash out of its 4 billion. No one cares. It's worth 3 and 3.8x revenue. They care a little bit, but they don't care too much. So I still see too many conversations of founders, folks of revenue executives blaming other people saying it's all about efficiency. This is the age of efficiency. It's not. We are back to growth.