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- What Founders Should Aim for in 2024, The Rise of the Forever Lean Startup - Tactician #0070
What Founders Should Aim for in 2024, The Rise of the Forever Lean Startup - Tactician #0070
"Founders in 2024 should aim to keep things simple. Like, if your business plan can't be explained to a five-year-old, maybe it's too complicated. 'We leverage synergistic platforms to... ' 'Look, man, do you sell cookies or not?'"
04/03/24
What Founders Should Aim for in 2024
Why Read (5-7 minutes):
Understand the shift from prioritizing efficiency to focusing on growth and innovation, especially with AI's emerging role, to build a great, high-value companies.
Author:
David George , General Partner at a16z
Link:
Key Concepts and Tactics:
Context of Recent Founder Challenges:
"Everyone knows that founders have been on a whipsaw over the past several years. Pivoting from growth at all costs in 2020 and 2021 to efficiency in 2022 and 2023 meant slashing budgets, shelving new projects, doing RIFs, and picking fights with your cloud provider over your bills."
Transition to a New Phase:
"But now, the market is stabilizing and companies’ optimization cycles are coming to a close. Efficiency alone doesn’t build a generation-defining company—it’s table stakes. So this raises the question: what now? What should founders aim for in 2024?"
Definition of a Great Company:
"A Great company brings the most innovative products to the market and continuously evolves them to meet changing demand... A Great company uses a tough market as an opportunity to break away from the pack and outrun its competitors."
Importance of Growth for Greatness:
"And the best way to become Great is to refocus on generating fast growth.”
Valuation Emphasis on Growth:
"The truly Great, highly valued companies all have excellent growth and margins... But when we take a look at growth, it’s clear that the companies trading over 20x are also the companies that grow the fastest."
Future Outlook and AI’s Role:
"AI is going to turbocharge this expansion, and I expect there will be 200–300+ of these companies over the next 5–10 years... Getting back into the growth mindset is definitely a shift from the last 2 years."
The Rise of the Forever Lean Startup
Why Read (5-7 minutes):
Learn about the emerging trend of "forever lean startups," leveraging AI and global teams for growth with minimal overhead.
Author:
David Cummings, Founder at Atlanta Ventures
Link:
Key Concepts and Tactics:
Introduction to the Concept:
"Last month, I was talking to an entrepreneur I had heard of before but hadn’t met in person. We got to talking about the ups and downs of his business, and he shared that things are going really well. Revenue has been growing fast. They just had their first profitable month, and it looks like it’s going to be a great business."
Strategic Team Structure and Use of AI:
"Their goal is to never have more than 10 employees and instead, they lean heavily on ChatGPT and other AI tools to augment their onshore, in-person team."
Global Distribution of Functions:
"Then, they have a growing presence in Eastern Europe for all of their development efforts and a customer service presence in the Philippines."
Automation and Outsourcing as Core Principles:
"Everything that can be automated internally is automated; everything that can be outsourced is outsourced."
Definition and Significance of the Forever Lean Startup:
"The ultimate result is a new category of startup: the forever lean startup."
The Future Landscape of Startups:
"Thinking more about this model, I think this is going to be a serious trend in startupland... The rise of the forever lean startup is something we’re going to see much more of over the next decade. Look for a whole new class of entrepreneurs that refine and build best practices around this model of maximum flexibility with minimum overhead."
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