👋🏾 Hi friends!

As summer comes to a close, I’ve been battling the heat in Italy and, dare I say it, am now looking forward to getting a bit of cool weather back in London 😅

In the final episode of Nothing Ventured for the season, I had the incredible pleasure to interview Piers Linney – ex Dragon from the BBC’s show, Dragons’ Den. All I can say is that it was an absolute pleasure getting the chance to explore how Piers got to where he has gotten to and his thoughts on everything from exiting his first business (a newspaper round!), to appearing on the Den and his thoughts on AI and why we need to do more than pay lip service to DEI – you don’t want to miss out on this episode 💪🏾

I’m going to be taking a break for a couple of weeks so this is the last you’re going to hear from me for the rest of the month, hope you have an incredible end to the summer and I’ll catch you on the other side!

Ciao for now 😃 

I’m well underway writing about all the things I’ve learned from the last couple of decades as founder, CFO and CEO, so sign up for early access to Off Balance – The Book and feel free to share with anyone else you think might enjoy it 😄.

Now let’s get down to business…

In this weeks Off Balance:

🎙️ Ex Dragons Den Dragon Piers Linney on Nothing Ventured 🤯
📈 How to move from growth at all costs to the new holy grail of Efficient Growth

𝗬𝗼𝘂’𝗹𝗹 𝗻𝗲𝘃𝗲𝗿 𝗴𝘂𝗲𝘀𝘀 𝘄𝗵𝗮𝘁 𝘁𝗵𝗶𝘀 𝗗𝗿𝗮𝗴𝗼𝗻’𝘀 𝗳𝗶𝗿𝘀𝘁 𝗲𝘅𝗶𝘁 𝘄𝗮𝘀… 🐉

As this season of Nothing Ventured wraps, I couldn’t be more excited to introduce our final guest for Season 5, someone that really needs no introduction at all…

I spoke to Piers Linney, best known as an investor on the BBC show The Dragons’ Den in which budding entrepreneurs get three minutes to pitch their business ideas to five investors, he has also featured on Channel 4’s The Secret Millionaire.

But beyond the media, Piers has had 25 years across a variety of sectors, be it law, entrepreneurship, Venture Capital, investment banking, innovation or technology.

He has been a NED at the British Business Bank and is currently Adviser to Sky on their Diversity Advisory Council, Chair of Atherton Bikes whose bikes took both first and second place in the 2023 World Championships and is the Co-Founder and Executive Chairman of Implement AI.

My top takeaways from this wide ranging conversation:

1️⃣ 𝗔𝗺𝗯𝗶𝘁𝗶𝗼𝗻 𝗶𝘀 𝗲𝘃𝗲𝗻𝗹𝘆 𝗱𝗶𝘀𝘁𝗿𝗶𝗯𝘂𝘁𝗲𝗱: Piers talked about the importance of recognising that ambition knows no boundaries. Regardless of background or circumstances, ambition is a universal trait that can drive success in entrepreneurship and beyond.

2️⃣ 𝗧𝗵𝗲 𝗳𝘂𝘁𝘂𝗿𝗲 𝗼𝗳 𝗔𝗜 𝗶𝗻 𝗦𝗠𝗘𝘀: Piers delves into the significance of integrating AI into small and medium-sized enterprises (SMEs). He emphasizes the need for businesses to adapt and embrace AI technology to enhance productivity and efficiency in the evolving digital landscape.

3️⃣ 𝗔𝘂𝗴𝗺𝗲𝗻𝘁𝗶𝗻𝗴 𝗵𝘂𝗺𝗮𝗻𝘀 𝘄𝗶𝘁𝗵 𝗔𝗜: Piers discusses the concept of augmenting human capabilities with AI technology. By leveraging AI agents for repetitive and mundane tasks, businesses can empower their workforce to focus on more meaningful and strategic work, ultimately driving innovation and growth.

We also talked about:

🗞️Exiting his first business – a paper round!
🧮 How there weren’t many business role models in the Lancashire mill town he grew up in, so he was told to be an accountant.
🔮 From hustling businesses, delivering newspapers, going into law then banking and into tech.
💃🏽 Why DEI is about both about being asked to the party but more importantly invited to dance.
📊 How ambition is evenly distributed.
🤑 How he got a 45x exit from on his Dragon portfolio.
🌎 How and why nation states are obsessed with AI and why we should be too.
⚖️ Equality of access to opportunity.

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Now let’s get into it.

Off Balance

There’s been a fair amount of ink spilt on the shift in the VC landscape (not least by me), and the new mantra of efficient growth has taken hold as a catchphrase of how you need to build a VC backed business in 2024 and beyond.

But this doesn’t necessarily give founders the tools to understand how to move from pure growth to efficient growth so here are some ideas from me on how that can be achieved.

On efficient growth.

I speak to ALOT of VCs and founders and our CFOs are in the thick of things every single day.

Over the last couple of years there has been a major inflection in the whole VC industry that hasn’t gone unnoticed.

The first phase was a slowing of both the velocity and volume of deals – fewer companies getting funded and over more time.

The second was a reversion to, anecdotally at least, more R&D heavy companies – lots of life sciences, hardware and – of course – AI startups.

The third phase has been the one that has a lot of founders and frankly CFOs scrabbling to figure out how to proceed:

Efficient growth.

What the heck does that even mean?

VCs tended to look at businesses that could scale quickly.

A template growth pattern would be 33322 meaning a tripling of revenue for a couple of years followed by several years of doubling.

If $1m was the starting point it would go:

1m ➡️ 3m ➡️ 9m ➡️ 27m ➡️ 54m ➡️ 108m

Reaching the $100m mark on a 10x revenue multiple would lead to the hallowed unicorn status of a $1bn valuation.

The ‘traditional’ way of getting this growth was to pour VC dollars into acquisition and product sprinkled with the odd M&A to juice the numbers up.

But that worked when money was “cheap”. You could burn capital and simply go out to raise more.

But Toto, we’re not in Kansas anymore…

As money became more expensive and investors retreated they still wanted large outcomes from the businesses they backed but want them to do it with less capital, fewer rounds and a more thoughtful approach to burn and runway.

Enter efficiency.

CFOs around the ecosystem have been working out how to make each dollar work harder for longer without impacting scale.

This is not a simple circle to square for most young businesses as they are starting from a low base, marketing was the tool that got them further, faster.

So how can CFOs help drive efficiency without impacting scale? A few pointers:

Trim and manage headcount – the impetus to hire when you land new funding is strong. You have to resist and make the case for each new hire. No ‘fat’ in the system.

Move from acquisition to retention – it’s cheaper and more valuable in the longer term to retain customers rather than trying to bring ever harder to land new ones.

Focus on reducing churn – coupled with that is understanding why customers churn and reducing leakage – as Ivan Hoo recently posted, don’t keep trying to fill a leaky bucket.

Stop cash leaking through poor working capital management – chase debts, negotiate terms with creditors, manage inventory tightly.

Add debt to the mix – debt makes businesses more efficient immediately as repayments force ventures to treat their cash as a more precious resource.

Forecast, forecast, forecast – if you aren’t planning you’re planning to fail. Know numbers intimately.

Double down on unit economics – Ensure every part of your business model adds up. CAC (Customer Acquisition Cost), LTV (Lifetime Value), and gross margins need to align to ensure long-term profitability. CFOs will use these metrics to allocate resources in the most efficient manner, driving sustainable growth.

Optimise operational efficiency – Streamline your internal processes. Evaluate your tech stack, automate repetitive tasks, and eliminate bottlenecks. Every operational improvement frees up resources and allows teams to focus on activities that directly contribute to growth.

Partner strategically – Explore strategic partnerships that can extend your reach without heavy investment. Partnerships can unlock new customer segments, distribution channels, or technology capabilities that fuel growth while sharing the cost burden.

Prioritise profitable growth – Shift the mindset from growth at all costs to growth with profit in mind. Focusing on profitability as you scale creates a healthier financial foundation and makes your business more attractive to investors in this capital-constrained environment.

Whilst this is not an exhaustive list, it gives you a foundation to work from. Review your business from the bottom up and understand exactly what levers you have to shift how the business operates to a more efficiency driven profile.

Ultimately, in this market and environment, it’s going to be critical to figure out how you can drive efficiency throughout every aspect of the business, from automation to maniacal obsession over metrics and unit economics, this will allow you to survive longer and make sure you’re not just burning cash in pursuit of the holy grail of growth.

As always, my office hours are open, if you’d like to chat about this or anything else, just grab some time 😊.

I hope you found Off Balance #49 useful. As always, I’d love to get your feedback and understand the sort of topics you would love to hear about.

Just hit reply to this mail or drop me a line at [email protected] and let me know 😊

🚀And that’s a wrap for this edition of Off Balance – I’d appreciate your feedback so just reply to this email if you’ve got something you’d like to say.

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That’s it from me so until next time…

Stay liquid 🙂

Aarish