The Efficient Growth Memo

Growth at all costs

Many companies grew until 2022, mainly focusing on new customer acquisitions. Money was free-flowing; valuations were sometimes 10x multiples of current revenue and acquisition costs that were 2x the customer lifetime value did not raise questions. We call this the ‘Growth at all costs’ period, when many leaders launched new products, hired more employees, and liberally purchased every software the team wanted—anything and everything to fund the acquisition pipeline.  

2023 – The year of efficiency

As capital became expensive by mid-2022, many business leaders had to make a tough decision: continue acquiring new customers with the same cost propositions as before or be conscious of every aspect of their R&D and GTM operations. Deals got smaller [in $ value], slower to close, and unpredictable in terms of win consistency. Companies needed to stop funding projects that did not yield results and double down on those that did bring repeatable success. They had to cut down on tools and processes they did not need. Zuckerberg aptly labeled 2023 the ‘Year of Efficiency’. 

We are now well into 2024. How do we predict what this year has in store for subscription businesses?

2024 – The year of efficient growth

From deeper conversations with our customers, we have observed a growing trend of leaders looking to grow their businesses this year. The time has come to slowly move out of our ‘efficiency-only’ shells and become bold and ambitious again. However, this is not a return to the good old days of 2021. No, in many ways, this is a new beginning. Companies must be prudent about their investments while unlocking levers to grow inorganically. 

So, at Chargebee, we label 2024 as the year of ‘Efficient Growth.’ This year, we will carry the lessons learned from 2023 and chart a responsible way back to the growth rates of 2021. We are now a part of a new era of responsible growth. 

At Chargebee, we have 6,500 businesses driving their growth operations through our platform. We identified that not all companies struggled through these last two years. Companies with a well-balanced growth strategy did well and could pivot during these market conditions. These companies continuously focused equally on retention, acquisition, and scaling processes —in the good and lean years. We call this our Revenue Growth Management framework for business success.

Our latest product innovations are built around this understanding of the DNA of successful businesses and helping companies compete and win in these challenging markets. Here’s a sneak peek into our latest updates. 

Brian Clark, President – GTM, Chargebee, will talk about how companies have shifted their growth strategies at Beelieve London on April 18th. He has been a student of documenting growth through his years building Sirius Decisions [later acquired by Forrrester] and is super passionate about this topic. You can meet him in London by registering here.

You can also learn more about the state of the subscription industry in our upcoming webinar, The State of Subscriptions and Revenue Growth, where we will launch our industry trend report.

Save your spot.