Seattle next week, COGS, economies of scale

✈️ First up, I’m flying to Seattle on Sunday for some 2026 strategy meetings coming next week. My schedule is fairly packed, but if you’re in town or want to organize a quick workshop or a talk this coming Mon or Thu, hit Reply and let me know!

I also wrapped last week with my birthday party, gathering 50 people in town for hookah and drinks - and fully immersing in the offline mindset. The saturation of digital outreach and AI-generated posts is quickly reaching the “banner blindness” era, and I’m ignoring more of my inboxes most of the week nowadays - unless I recognize a specific brand/name and the first 5 words of a message don’t resemble a cold pitch. 🙂 

On the costs of running a business

A recurring conversation I had over a dozen times just the past couple of weeks revolved around the mechanics of running companies - from service businesses through cloud and SaaS to boutique and luxury ones.

We often tend to forget how large businesses - household names, global brands, multinational corporations - rose from the very beginning, taking dozens of years, some over a century, to mature and build a legacy.

Entrepreneurship is far from easy - a topic I’ve explored deeply in my first book, “126 Steps to Becoming a Successful Entrepreneur: The Entrepreneurship Fad and the Dark Side of Going Solo”.

Some practical, high-level examples:

1. Restaurants

The cost of a meal in a restaurant is negligible, considering the cost of ordering groceries and cooking yourself, at the same volume, amount of time, quality of product, and taste - from a chef’s skills to expensive kitchen utilities, the cost of a building, waiters, bartenders, tables and chairs, glasses and utensils - and years to pay it back effectively, with all the risks of ups and downs, low foot traffic, limited utilization.

2. Tech giants

Most of what’s happening online is virtually impossible to replicate at a small scale - from search engines to social media to LLMs. The cost of running these reliably online, the massive volumes of data, the warehouses with data centers with cooling, and blazing-fast connectivity, and all the staff required to make it happen.

For context, Google’s parent company, Alphabet, employs over 180,000 people, and Amazon is at nearly 1.5 million by now.

3. Web/digital agencies

The type of business that seems trivial to run as you can start one in your living room with just a laptop and an Internet connection.

And while a freelance gig may be easier to comprehend, having launched 50+ person service businesses myself, there’s a lot more going on behind the scenes - from on-site expenses like office rent and communal services, to employment costs (pension, health insurance etc), to additional insurance, gym cards, snacks, gifts, vouchers and others to maintain, to equipment - and that’s on the light end.

Actual resource allocation and utilization is the heavy lifting here. Selling a web migration takes different skills from different people, including account or product managers, quality assurance engineers, sysops/devops people, along with designers and different developers. Keeping IT people around, scoping effectively, back and forth and utilizing timelines, sick leaves and vacations, it takes a pretty heavy toll on a business to maintain profitability and cash on hand to cover payroll every couple of weeks.

I won’t even start on taxes, potential bottlenecks, unpaid invoices, legal risks, severance packages - and everything else that justifies the premiums companies work toward to maintain profitability and make it all possible.

How economies of scale help

One of the key reasons we serve a handful of private equity businesses, and I personally invest in 20+ startups, are the economies of scale.

All of these exercises and equations are extremely hard when a founder scales from themselves to a clone or a first hire, then a second one. Then 5, then 10, 20, and so on. While resets are a thing (the first 5 people can be 100% billable, before adding a product manager, then adding an office manager or HR or marketing or other non-billable resources that break the math later).

But after a certain size, with some cash in the bank, with a portfolio of customers, after several years in market - the economies of scale help make bolder moves.

While a standard PR campaign or a decent event sponsorship will immediately bankrupt a solo founder, it’s business as usual even for 20-person companies. Tradeshows are still a go-to for 50-100-person businesses in different categories.

Spending money to make money is a real mantra - as long as you’re aware of the right levers to pull in a given category for the right ICP.

Certain campaigns may be cost-prohibitive - like the city takeovers of businesses like the Artisan billboards in San Francisco or the Friend dot com New York provocative campaign a couple of weeks ago. And it’s impossible to spend millions on guerilla marketing unless you have several spare millions in the bank - or have raised a significant round for a business model that isn’t profitable yet.

And build vs. buy is what it boils down to

All businesses that crack the code to math at scale have solved for several core problems:

1. Customers prefer to pay for a service/product/solution/subscription instead of building/doing themselves

2. The cost to buy is lower than the cost to build

3. Businesses tied to personnel with access to capital prefer contractors, consultants, agencies - unless they want to develop that competency in-house (with all the staffing that comes with that)

4. Companies renting cheap SaaS don’t have a viable cheap solution in many cases

5. The difference between SaaS or vendors is a combination of trust factors, skills, reliability

6. Risk management is what it boils down to often - convincing the client that risks are negligible

7. Cost of inaction is the next trigger in line - what does the business lose if they don’t act

Ultimately, businesses need to juggle a million things to build that brand - between hiring, sponsorships, campaigns, sales commissions and affiliate fees, the actual cost of running a business. This comes at a premium - and nowhere near the actual premium of buying a luxury bag for $5,000+ manufactured for under $100 in China.

Then again, it’s a great business model that just works.

(and here’s how to work with me)

Mario

📰 How consultancies serve as a pulse check. My take on compiling recent trends and insights from running 2 consultancies.

📚️ Books I read this month

• “The Sweaty Startup” by Nick Hueber (85% in)

• Ray Dalio’s “How Countries Go Broke: The Big Cycle” (55% in)

• The FP&A Handbook: Mastering Financial Planning & Analysis (40% in)

• “Revenue Architecture” by Jacco van der Kooij (55% in)

• “Hooked” - on habits and cues and product alignment (50% in)

• “The Sales Acceleration Formula” ✅ 

• I have 2 more in the backlog, one on RevOps and one for sales leaders, coming soon as I catch up on the list above!

🎤 Podcast guests to recommend? Lenny has lined up some of the leading names in tech and digital on the planet - I’m open to warm introductions for the B2B growth hacking playbook podcast as well.

🔖 Serve content that changes on the fly. Marketers use real-time personalization to raise ROI and cut customer acquisition costs.

🔖 Lift e-commerce conversions with recommendations. Learn how AI-driven recommendation tools create personalized shopping experiences that convert.

🔖 Measure models with the right benchmarks. Evaluate outcomes more clearly using these top 7 evaluation metrics for AI performance.

🔖 Raise ROI with cleaner reporting. Standardized cross-channel reporting helps dive into insights and fix inefficiencies.

🔖 Reframe how innovation begins. Companies stand out by applying lateral thinking strategies that challenge assumptions and fuel fresh ideas.

🔖 Invest for impact at scale. See how impact investing strategies enable long-term social returns through focused approaches.

🔖 Optimize seasonal spend precisely. Smart marketers shift outcomes using dynamic budget allocation and agile strategies.

🔖 Build systems that outlast founders. This scaffolding legacy outlines how to step back without losing momentum.

🔖 Train faster decision-makers at the top. Explore 5 frameworks that help executives build lasting learning systems.

📰 Smart AI policy doesn’t stifle growth. California’s SB 53 formalizes safety without slowing innovation.

📰 Yen tumbles after Japan backs stimulus. Yen slides and yields rise after Japan’s pro-stimulus leader wins party vote.

📰 Lecornu braces for tighter spending. PM Lecornu navigates a new government budget amid economic and political strains.

📰 Paramount eyes scalable news growth. Paramount’s $150 M Free Press purchase targets talent-driven media expansion.

📰 Oracle embeds AI for revenue teams. Oracle’s AI agents give teams direct access to finance and inventory data.

📰 ChatGPT gains in-app third-party tools. ChatGPT’s new app integration brings external services into conversations.

📰 Deloitte issues hefty refund and expands AI. Deloitte refunds the government yet launches its largest AI initiative.

📰 U.S. hiring pipelines face new hurdles. New $100K H-1B fee sparks lawsuits and disrupts hiring pipelines.

📰 AMD challenges Nvidia’s AI lead. AMD taps six gigawatts of compute power via an OpenAI deal.

📰 Macron seeks crisis talks to steady France. Macron requests crisis talks after abrupt PM resignation reversal.

📰 Real-time analytics enter healthcare. OneMedNet and Palantir partnership brings real-time analytics to providers.

📰 Duolingo builds its own adtech. Duolingo develops an adtech system to supply direct, brand-safe inventory.

Let’s see the latest offers from Flippa. Don’t forget to sign up for their newsletter for daily/weekly/monthly offers like these.

Serbian Omnichannel Ecommerce SaaS: 3-year-old subscription e-commerce platform helping SMBs launch full stores in ~15 minutes with mobile apps and a shop manager - available for $110,338 (reduced 44%).

Open-source HTML SaaS: 12-year-old FL-based open-source HTML framework monetized via sponsorships and partner ads; ~75K active subscribers, low 7% churn, ~$5.4K monthly profit on 100% margin - asking $188,374 (down 35%).

Profitable English Tutoring App: 5-year-old Turkey-based iOS/Android + web marketplace with ~$350K ARR, ~34% margin and ~$9.7K monthly profit; 1,000+ paying students - offered at $453,000 (reduced 23%).

Background Verification Business: 5-year-old Canadian background-check company generating CAD $1.5M annual revenue and ~CAD $41.1K monthly profit, with minimal overhead, strong brand recognition, and ~31K monthly page views - asking $2,989,952.

High-Ticket Pool & Spa Equipment Amazon FBA: 13-year-old France-based pool & spa equipment brand with €6.2M TTM revenue, 12% margin and ~€64.4K monthly profit, attracting ~126K page views per month; self-operated with 6.1x profit multiple and 0.7x revenue multiple - priced at $5,543,335.

Working with me

Here are the main projects I focus on:

🌐 Scaling $30M - $100M+ companies on top of WordPress. DevriX provides full RevOps consulting + delivery with GTM enablement for PE-backed portfolio companies, traditional tech, healthcare, finance, and professional service businesses pacing toward revenue growth initiatives. Our standard retainers between $10K and $40K include revenue lifecycle services for marketing and sales leaders, FP&A for financial teams, pipeline enrichment through websites and dozens of lead sources, automations and delivery integrations, CRO and ongoing testing, product delivery and platform integration solutions, and more through our consulting solutions.

🚀 1:1 Consulting. At Growth Shuttle, I run two popular plans: Async Advisory ($3,500/mo) for $3M - $30M founders and executive teams and the smaller Strategic Growth Circle ($997/mo) for $100K - $500K entrepreneurs, agency founders, scale ups.

📈 Building US LLCs from Europe. I help European and Asian founders scale faster through doola and their “Business in a Box” model. Also suitable for US citizens (given their bookkeeping solution), but in very high demand across Europe.

📊 Post-Merger Integration. I support M&A initiatives through Flippa’s marketplace. Working closely on PMI initiatives for PE companies and fast-growing startups integrating new companies within their portfolios, enabling data pipelines, and securing more deals through my personal network.