Bulk And Lean
How to stay disciplined during high growth
“Growth, Growth, Growth!”
Times are exciting when revenue is coming in and customers love you.
It’s inevitable you will up your spending to generate revenue— everyone does.
But beware.
It’s easy to get carried away with expenses that are profitable but are not optimal.
You may have ten profitable marketing campaigns running…
Some are returning 5x what you spend, while others are returning 2x.
2x is good!
But you need to kill these campaigns to lean out— and double down on your winners.
Leaning out doesn’t just refer to marketing and sales.
This also refers to product investments.
While investing in your product you need to be ruthless and be honest.
Will users love this new feature?
Or is it marginal and wasting your teams’ time?
It’s extremely important to regularly audit your spending— every 8 weeks at most.
You need to be honest with yourself and figure out what’s actually driving growth.
Most importantly: What is driving good growth, but not world-class growth?
You’ll find 20-50% of your spending is unnecessary.
It’s fat.
When times are good it’s extremely easy to be financially lax and bulk up.
Letting product tests carry on for too long.
Letting profitable B-tier marketing campaigns run.
Spending money on your “brand”.
While growing, you will grow fat with expenses— everyone does.
It’s easy to spend money when you are growing fast.
Like hitting the gym while bulking, you gain both muscle and fat.
But then you need to burn your fat to reveal the newly built and bigger muscles beneath.
Trim the fat. Stay disciplined.