☕️ Not just blowing smoke up your proverbial… It’s feeling like this is going to be an absolutely EPIC week. 😤 Like… a total barn-burner/barn-raiser, depending on your barn up/down preferences.

Can literally feel it in our bones.

LFG!

| TWEET OF THE WEEK

This is the third part of a 4-part series on strategy from the CFO seat.

Increase value or decrease costs?

Two weeks ago we defined the role of the CFO in business strategy.

Last week we laid down some theoretical foundations with classic strategy models.

This week, we start to connect strategy to financials. Think of it as a cousin to the recent series on unit economics.

A great strategy should unlock superior returns. So this week we’ll get into what that means, and how it should affect investment decisions. Specifically, how do you decide where to make strategic investments? How do you cut through the noise to figure out what merits the checkbook and what doesn’t?

Let’s work a simple, single-product example:

There are three parameters which define the financial impact of a strategy:

1. Unit cost of the product

2. Price of the product

3. Value to the customer of a product

In order for a business to maintain its market share, there must be some equilibrium of these three things.

The price charged needs to be lower than the value provided, otherwise customers would stop buying. And the price needs to be far enough above cost to survive (and reinvest). Caveat: Unless you have an equity provider willing to fund the gap between price and cost until equilibrium is found in the future - i.e. VC backed.

A simple visual for this equilibrium:

Note: this isn’t to scale. It’s the relative positions that are important, not the absolutes. For this example see cost as total cost per unit (COGS, expenses, depreciation, finance costs, etc.)

So the job of the strategic leader is to disrupt that equilibrium. And find a way to build an unfair advantage into that equation - and earn superior returns.

The Role of Price

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| QUICK SHOTS

• @maxwellfinn It’s wild how many SMBs refuse to take risks with their marketing bc they fear how it could impact their “brand” or pissing off some people and getting negative comments. 3 things…

• Sean Frank If your company has less than 500 employees, then you should have been in founder mode the whole fucking time. the essay isnt for you; its for the bloated Series D SAAS getting its ass beat by chat gpt

• @KateBour Fixing your product messaging should be the top priority of every aspiring lifestyle entrepreneur. If you can’t sell… you can’t scale. (And you’ll always be a slave to your business.)

• @crowizard_stef For the guys that are looking to or are running subscription brands: Build subscriptions only acquisition funnels. Absolute crucial compared to focusing on one time purchase or pushing both

• Jordan West I saw someone post on X yesterday about it’s ridiculous it is to iterate on ad concepts instead of coming up completely new concepts… 😱🤦‍♂️ Let me tell you why they’re wrong ❌👇

• @hcaz32000 Starting to be concerned about @Shopify. Despite all the great numbers coming from earning calls. Over the last 30 days, we've seen over 50% of uninstalls be done by CLOSED stores.

| HERE FOR THE MEMES

| AND IN OTHER NEWS…

| GET LINKED

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| STAT ATTACK 👊

| THE OUTRO

If you aren’t feeling the EPIC vibes yet, don’t worry. Usually they kick in after a certain amount of caffeine has been consumed. So pour a little extra redbull in your frappuccino and let’s 👏 get 👏 fired 👏 up!

✌️

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