Elad Gil: “The best companies are almost always incredibly capital efficient” Elad observes that a lot of the biggest companies in the world (e.g. Apple, Google, Amazon, eBay, etc.) didn’t raise a lot of money and were very capital efficient: “I think there’s two reasons for that. One is because people are willing to pay them a lot of money for their product because it’s important to them. It’s a sign of product/market fit. And then two is the people are actually running the company thoughtfully and efficiently and asking: when do I need to add people or not? When do I need to spend money or not? And so it’s just a different mindset. It’s actually very important to build something long-term and sustainable.” This is important to keep in mind in a world where founders use metrics like capital raised or employee headcount to compare themselves to other founders. And if you’re not capital efficient, you should ask why. As Elad puts it: “If nobody’s willing to pay for something that you’re building, maybe it’s not worth building. Unless it’s a consumer product. Then it’s a different story.” Video source: @southpkcommons (2023)

Watch the full @southpkcommons interview with Elad Gil here: