Firehose #194: ⚖️ Operating leverage. ⚖️

Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media). 

once you’ve got product-market fit with a rinse and repeatable growth strategy, spend is going to shift toward S&M away from R&D and raising equity to plug the CAC to payback gap in cash flow seems like an incredibly expensive way of achieving this when alternatives like Pipe exist. I think VCs that invested at the earlier stages are very aligned h... See more

Instead of increasing the fees you charge all of your users, Gurley recommends that marketplaces figure out other ways to make more from those users who want more from you. Back then, he brought up advertising as an example. If you can get some of the suppliers in the marketplace to pay for ads, you can effectively earn a higher take without needin... See more