Capital Efficiency Finds Its Moment

5 and 10% of their annual operating expenses. And this is a profitable company that is growing and doing well. That's what good experienced managers do in times like this. That company will continue to grow, but they know growth will slow, the sales cycle will be longer, and they want to be sure that they will remain profitable.

Much has been written about how the "nuclear winter" of 2001-2003 led to many of the innovations we've been tapping into since. Clearly the capital efficiency revolution was fanned in the nuclear winter. When capital is scarce, smart people figure out how to do more with less. So first and foremost, let's all take advantage of this capital efficiency to get our costs down and build businesses with even more operating leverage. And hopefully there are new tricks out there that we can use to get even more capital efficient.

It's never pleasant to face the truth about darwinian capitalism. The bad companies die. But that harsh fact forces all of us who want to survive to evolve, adapt, and innovate. The time has come to leverage capital efficiency, not just to make it easy to do a startup, but to survive a downturn. Capital efficiency has found its moment and we must embrace and extend it.