“We’re in a new world where the highest-leverage people and companies will be rewarded. If you’re building a 20-person company doing what used to take 200, you’ve already won.”
The past ~20 years of venture investing rewarded two vanity metrics:
Fast forward to today, and we have enough examples to show that prioritizing these two things doesn’t actually build a durable business. (It actually does the opposite.)
If you talk to enough GPs today or you read through enough LP reports, you’ll notice a pattern about the companies they are showcasing: they are growing the fastest with the fewest amount of full-time employees.
This is the primary theme we are betting on with Outlaw - revenue-per-employee is the new North star.
Companies like Midjourney, Anysphere, and Adept have all scaled past $60m ARR with under 50 FTEs, and more examples of like this are popping up each week.
The way we’re thinking about it, we think the playbook for high-growth, efficient companies goes like this:
What we now think of as departments responsible for specific domains of work will convert into workflows governed by some type of feedback mechanism. Each department then becomes a loop with a pattern of observe —> decide —> act.
Some departments of the modern firm will disappear as the ‘labor’ resources are mostly no longer human. We are spending most of time towards back-office tooling as we see the most opportunity in these invisible functions of businesses.