Beyond the Cost-Cutting Mindset

A founder once came to us asking for help to ‘cut burn.’ The company wasn’t in crisis, but growth had slowed and investors were starting to ask harder questions. The founder took the common route, slowing down hiring, reducing marketing budgets, and postponing planned upgrades. While these measures worked in the short term, cutting burn by nearly 30%, they also reduced the company’s momentum. Experiments slowed, new initiatives stalled, and the signals that once attracted investor interest began to fade.

The Real Issue

The problem wasn’t that the company was spending too much. It was that they lacked a clear, strategic purpose for the money they were spending. Many founders fall into this trap, assuming that lowering burn automatically strengthens the business, when in fact, indiscriminate cuts can weaken its growth engine.

Capital Allocation over Cost Cuts

Burn rate should be viewed as a measure of how effectively capital is being allocated, not just a number to minimise. Discipline is important, but cutting essential growth investments in the name of savings can be just as dangerous as overspending. The focus should be on ensuring that every significant outflow supports core priorities and delivers measurable returns.

The Takeaway

If you are feeling pressure to reduce spending, start by identifying which expenses truly move the business forward. The goal isn’t to spend less; it is to spend with purpose.

Review your top three expense categories this month and ask yourself: are they moving the business forward or simply keeping it running?