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You can’t be serious. Lots of businesses easily have that much just in cost of goods or marketing spend. $100M is not such a crazy amount especially considering the cost of hiring technical people.

Also note that the benchmark of “efficiency” should be a function of growth, not some absolute standard.

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I think we are saying slightly different things. COGS are composed of many smaller capital allocations. According to this untested, pet thesis, putting on a report that $250M was spent on capex is just fine; but if you go to a single vendor and sign a $250M contract, you have wasted money by not being more careful about how that capital is allocated. $100M is _a lot_ of capital, and I think it’s easy to lose sight of how much stuff you can do with that much money when applied to industries that don’t pay tech salaries for speculative growth. As examples: how many pounds of food could you grow for 100M? How many doctors could we train for 100M?

I think the thesis is thought provoking. Not sure yet if it’s worth anything, but it also doesn’t preclude businesses from having massive cashflow.

Maybe 200 doctors at prevailing medical school rates? That’s not an obscene amount.

I mean, it is obvious that you cannot sustain efficiency as you scale (Amdahl's law) but (1) $100M is not that crazy to be able to keep track of in your head, even for a single individual (I can imagine a successful real estate developer with a handful of ongoing projects and various other personal investments), and (2) in a high growth situation, it makes financial sense to sacrifice some economic gain for scale. In your original example, sure an investor would be better off, if they could actually find 10 good investments with zero cost, to spread their money, but very likely they'd be better off taking the big one and spend their energy raising more money.

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