Ed Sim on Capital Efficent Investing
Ed Sim from Beyond VC on Nov 19 writes about what I have been wittering on about since I started this blog namely Capital Efficient Business Models : You will have to scroll down to find it as I cannot work out how to go straight to the place.
His point is absolutely correct. Marketing costs may stay the same, but if you can create a product for a few million, smartly get the first product to market whilst running a low cost organisation then hopefully the initial and most painful burn will be limited. Once the product has real "traction" (presumably its a car wheel) then people can be hired to really sell the product. Given that these are always the most expensive part of a team hopefully they will be brought in commensurate with real sales opportunities rather than hopeful hype. At the end of this year all our companies will be cash flow positive. Some will require more cash to grow more rapidly. But if we cannot find it then they should be able to grow organically. Given that none of them were that expensive to acquire even a low growth scenario should see a reasonable return.
27 November 2003
Ed Sim on Capital Efficent Investing
Ed Sim from Beyond VC on Nov 19 writes about what I have been wittering on about since I started this blog namely Capital Efficient Business Models : You will have to scroll down to find it as I cannot work out how to go straight to the place.
His point is absolutely correct. Marketing costs may stay the same, but if you can create a product for a few million, smartly get the first product to market whilst running a low cost organisation then hopefully the initial and most painful burn will be limited. Once the product has real "traction" (presumably its a car wheel) then people can be hired to really sell the product. Given that these are always the most expensive part of a team hopefully they will be brought in commensurate with real sales opportunities rather than hopeful hype. At the end of this year all our companies will be cash flow positive. Some will require more cash to grow more rapidly. But if we cannot find it then they should be able to grow organically. Given that none of them were that expensive to acquire even a low growth scenario should see a reasonable return.
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