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TOPLINE HOTLINE: As I think about 2025 planning, how do I set the right growth target?

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CHAPTER

Planning for Growth: Setting Targets in a Favorable Economic Landscape

This chapter focuses on the importance of strategic planning as businesses set their growth targets for 2025 while addressing venture capital investors' expectations. It emphasizes adapting to market changes and executing current strategies effectively in a promising economic landscape.

00:00
Speaker 1
As we think about planning for 2025, how do we set the right growth target, particularly if we have venture capital investors on our cap table that are expecting us to drive towards some kind of revenue growth multiple that will get closer if not equal their valuation at the time of their investment. So are you thinking about leaning in heavily? Are you thinking about continuing on the same trajectory? And how do you think about making investments against 2025? And what is your prognosis for what 2025 will look like from a global macro economic perspective? I'll do the macro,
Speaker 2
but I'll do my thoughts on the other thing too. I think that 2025 is shaping up to be a good year. I will show signals that it can be a positive environment to do business in for a larger subset of companies than 2023 was, and maybe even 2024 has been. And I think the reasons I feel that way is that interest rates are going to start declining from September in the US. They've already been declining in other markets. I think the fundamental economy while showing signs of weakness, which is why they don't reduce the interest rates, is still a good economy. Like I don't think this falls into a recession. I could be wrong, but I don't think that this is gonna be a very hard landing. So I think the market was supposed to cool down. That's what they were doing. It's showing signs that it got cooled down and now they're going to start addressing interest rates, which basically reduces the cost of capital, which is an incentive to invest, which then puts everyone in a mindset to spend and buy. And I think that's a good environment to do business in and it'll feel a lot better once the rates are declining than when they were going up obviously, but also compared to when they were flat, which is how they've been for some time. So I think just from a macro perspective, 2025 should be a favorable market compared to the last two or three years. Again, we're not going back to 2020. We're not going back to 2021, but will it feel a little bit like 2019? Maybe like 2019 vibes is kind of what I think people should expect. And so that allows you to, if you feel that way, if you're not the pessimist who thinks this is all going to fall apart, then it allows you to be a little bit more. I don't want to use the word aggressive, I think just on the front foot with how you're thinking, like if a lot of the planning that happened in 2022 for 2023, and then in 2023 for 2024 was risk minimising, then I think this is now the market where you switch that towards, I think there's growth to be had, but let's be very thoughtful about how we want to do that. For my business, which is an adventure-funded business, the way I'm thinking about it is that we're in the more and better phase. Sometimes you're in the phase in business where you're strategizing and coming up with new things and running a bunch of experiments. And sometimes I think you're in the execution phase where it's more and better. We need to do the things we're doing, just more of them and better. And so that's a lot of the focus that we're gonna have for the first six months of the year. And we'd want to be very diligent as we have been for the last two or three years, around adjusting our way of thinking, if some data shows up in our KPIs, in our leading indicators, or externally, that gives us cause for concern or to be more bullish. So I think the other part is plans have to be more flexible. This is not written in stone. Think of plans as written in pencil with an eraser close by. You can adjust if you need to. So those are some general thoughts. Ajay, what do you think?

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