Starting a business doesn’t always require massive capital investment. At Exiteers we recommend adopting a strategic “mean” approach—being intentionally frugal without compromising quality—founders can extend their runway and achieve profitability faster. Here’s our practical guide to building a lean, efficient startup that maximizes every pound, with real-world examples that illustrate both successes and failures.
The Strategic Art of Not Spending Money
The most powerful expense is the one you never incur. Before any purchase, ask yourself these questions:
- Does this expense directly contribute to revenue generation?
- Can we delay this purchase until we hit specific revenue targets?
- Is there a creative, no-cost alternative?
It’s important to be honest with yourself. Many of us will have played the corporate budget game, twisting and contorting our business cases to make tentative links between the project and the corporate objectives, playing a kind of business-case buzzword bingo. If it felt like you were competing for scarce resources then, that is nothing like the scarcity of the start-up.
Success Story: Mailchimp bootstrapped for 17 years before taking any outside investment. Founders Ben Chestnut and Dan Kurzius focused solely on email marketing tools that generated immediate revenue, refusing to expand into other marketing channels until their core business was solidly profitable. This discipline eventually led to a $12 billion acquisition by Intuit.
At Evoco Digital Services (EDS) we bootstrapped from start to exit, so we lived the “mean startup” life and much of what we learned (sometimes the hard way) is contained here.
Where to Be “Mean” (Strategic Cost-Cutting)
1. Office Space
Run virtual as long as possible. When needed, consider co-working spaces with flexible terms before committing to a lease.
Success Stories: Zapier built a fully remote company from day one in 2011, long before remote work was mainstream. By avoiding office costs, they channelled resources directly into product development and customer acquisition, growing to over 300 employees without a headquarters.
At EDS we only ever had one office, in Hull, even though all the founders were living in London and the South East. We shared a building with another university business on the campus and trained all our Academy graduates here working in close partnership with the university.
Try:
- Working remotely or from home offices
- Using free public spaces like libraries and coffee shops
- Joining coworking spaces with flexible membership options
- Sharing office space with other startups
- Negotiating short-term leases with expansion options
Avoid:
- Signing long-term leases prematurely
- Overspending on prestigious locations
- Building out custom office space before product-market fit
- Committing to more space than currently needed
- Investing heavily in office furniture and decor
2. Technology
Start with minimal viable tech. Use open-source alternatives and free tiers of SaaS products.
Success Story: Notion began with a simple stack of largely open-source tools, focusing engineering resources on their core product rather than internal systems. They used GitHub’s free tier for version control, open-source databases, and minimal cloud infrastructure until scaling demanded more.
Try:
- Using open-source alternatives to paid software
- Taking advantage of startup discounts and free tiers
- Leveraging “freemium” SaaS tools
- Building with scalable but simple initial architecture
- Focusing on essential functionality first
Avoid:
- Purchasing enterprise-level software before you need it
- Overbuilding your tech stack with features you won’t use yet
- Paying for premium subscriptions when free versions suffice
- Custom development for non-core business functions
- Investing in expensive hardware that quickly depreciates
3. Marketing
Focus on organic growth and content marketing before paid acquisition.
Success Story:
Buffer built their entire initial customer base through content marketing and transparency. By openly sharing their journey, salaries, and learnings, they attracted both users and talent without spending on traditional advertising. Their blog became their primary acquisition channel, with a CAC (Customer Acquisition Cost) significantly lower than industry averages.
Try:
- Content marketing and organic social media
- Community building and engagement
- Strategic partnerships and co-marketing
- Speaking at industry events and webinars
- Personal networking and direct outreach
Avoid:
- Expensive brand campaigns before product validation
- Broad, untargeted paid advertising
- Hiring full marketing teams before establishing channels
- Premium sponsorships and events with unclear ROI
- Outsourcing to agencies without measurable outcomes
4. Talent
This is always a hard one to juggle, you will probably start out doing everything yourself but need to bring in the right people at the right time. These decisions also have implications far beyond the cost of hiring and paying talent.
At EDS our first people we invested in were graduates into our academy, probably not the first step that most companies take. We found that it worked really well as this generated strong loyalty and ensured we developed the right hard and soft skills.
Try:
- Hiring multi-skilled generalists initially
- Using fractional executives and specialists
- Working with freelancers for specialized tasks
- Implementing equity compensation to align incentives
- Developing junior talent with growth potential
Avoid:
- Building out departments before they’re needed
- Hiring full-time specialists for occasional needs
- Matching corporate salaries without offering other benefits
- Creating redundant positions due to poor planning
- Bringing on executives too early in the company lifecycle
When to Hire Sales People: We’ve seen people led astray here, reasoning that salespeople drive revenue. In principle this is true, but for a long time there will be nobody better than the founders to do the selling. It’s not just about making the sales, it’s about hearing the objections, getting the feedback and staying close to the customer.
Where to Be Generous (Strategic Investments)
1. Customer Experience
Never cut corners on elements directly affecting customer satisfaction.
Success Story: Chewy.com became known for sending handwritten holiday cards and sympathy flowers when pets passed away. While seemingly expensive, these gestures created such strong loyalty and word-of-mouth that their customer acquisition costs dropped substantially compared to competitors.
Try:
- Investing in responsive, human customer support
- Creating thorough onboarding processes
- Personalizing interactions where possible
- Following up after purchases or implementations
- Soliciting and acting on customer feedback
Avoid:
- Fully automating customer service without human backup
- Cutting corners on response times
- Deprioritizing customer success resources
- Ignoring customer complaints or suggestions
- Implementing user experience changes without testing
2. Core Product Quality
Invest in the components that deliver your core value proposition.
Success Story: Dyson famously developed 5,127 prototypes before launching their first vacuum cleaner. This meticulous attention to their core technology established their premium position and allowed them to command higher prices, more than justifying the development investment.
Try:
- Investing in robust testing and quality assurance
- Focusing development resources on key differentiators
- Prioritizing reliability and performance
- Building scalable infrastructure for core functions
- Dedicating time to user research and product refinement
Avoid:
- Rushing products to market with known critical flaws
- Cutting corners on security or compliance
- Ignoring technical debt in foundational components
- Compromising on features that directly affect user value
- Underinvesting in backup systems for critical operations
3. Team Culture
Being “mean” with expenses doesn’t mean creating a miserable work environment.
Success Story: Instead of expensive retreats, Basecamp implemented “Library Days” where team members spend dedicated time learning and exploring new ideas. This low-cost initiative became one of their most valued benefits, improving both retention and innovation.
Try:
- Creating opportunities for professional development
- Recognizing achievements publicly
- Implementing flexible work arrangements
- Fostering open communication and transparency
- Organizing low-cost team-building activities
Avoid:
- Neglecting team wellbeing to cut costs
- Creating a culture of overwork and burnout
- Failing to recognize employee contributions
- Maintaining opaque decision-making processes
- Ignoring team feedback about work environment
The Decision-Making Framework
W use a three-tier approach for expense decisions:
- Immediate Revenue Impact
- Strategic Necessity
- Nice to Haves
Tier 1: Immediate Revenue Impact
Green light for investments with clear, short-term revenue returns
- Sales enablement tools that demonstrably improve conversion rates (e.g., proposal software that increases close rates by 15%)
- Production equipment that increases output capacity to fulfill existing demand
- Developer hours to fix critical bugs preventing customer onboarding or causing churn
- Customer success personnel when support issues are causing measurable customer losses
- Targeted ads with proven positive ROI and short payback periods (1-3 months)
- Inventory expansion for consistently sold-out products with established demand
- Commission-based sales staff where compensation directly ties to revenue generation
- Performance optimization that reduces infrastructure costs while maintaining service levels
- Automation tools for processes directly tied to revenue fulfillment or customer acquisition
- Payment processing improvements that increase checkout conversion rates
Tier 2: Strategic Necessity
Proceed cautiously with expenses necessary for operations but without direct revenue impact
- Basic accounting software to maintain financial compliance and visibility
- Cyber security measures to protect customer data and business continuity
- Essential legal services for contracts, terms of service, and regulatory compliance
- Core team communication tools that enable remote collaboration
- Basic CRM system that scales with customer growth
- Modest office space when remote work becomes inefficient for team dynamics
- Insurance policies required by contracts or regulations
- Basic HR systems when reaching 10+ employees
- Cloud infrastructure that supports current operations with some room for growth
- Version control and development tools for technical teams
- Data backup systems to prevent catastrophic business disruption
- Quality assurance processes that maintain product standards
Tier 3: Nice-to-Haves
Delay these until you reach specific financial milestones or they become necessities. In many cases you might choose to never spend on some of these.
- Premium office locations or upgrades beyond functional necessities
- Advanced analytics platforms when basic tools still provide actionable insights
- Team retreats and expensive social events beyond simple team building
- Custom-branded swag and marketing materials without clear ROI
- High-end furniture and office aesthetics
- Subscription services with overlapping functionality to existing tools
- Industry conference sponsorships without targeted lead generation strategies
- Experimental marketing channels without validation at smaller scale first
- Corporate entertainment budgets and expense accounts
- Premium business travel (business class, luxury accommodations)
- Cutting-edge hardware when current equipment functions adequately
- Professional development not aligned with immediate business needs
- Rebranding initiatives when current brand is functioning adequately
- Industry awards and recognition program submissions that require fees
Each tier represents a different level of urgency and return expectation. The specific financial milestones for moving items from Tier 3 to Tier 2 or Tier 1 should be clearly defined based on your business model and growth stage (e.g., “after reaching £20K MRR” or “after securing Series A funding”).
The Pros and Cons of the Mean Startup Approach
Pros:
- Extended runway during the critical validation phase
- Forces creativity and innovation in problem-solving
- Builds discipline and focus on revenue-generating activities
- Attracts investors who value capital efficiency
Success Story: Zoom founder Eric Yuan drove a used car and worked from modest offices even after securing significant funding. This capital efficiency impressed investors during subsequent rounds and allowed the company to reach profitability ahead of many competitors.
Cons:
- Potential for false economies that hamper growth
- Risk of burning out team members if taken to extremes
- May limit your ability to move quickly on opportunities
- Can project unprofessionalism if taken too far
This post was inspired by our own experience and our work with early-stage founders navigating the challenging balance between conservation and investment. The most successful ones weren’t always the best funded—they were the most disciplined.
