The Mule vs The Pony

I like to break companies into two different categories.

Mules and Ponies. Mules are hardy. They perform well on steep terrain. They can carry a lot of goods. They are sure-footed and are in it for the long hall.

Ponies on the other hand aren't quite as hardy. They may look cool, but they cant carry as many materials as the mule. If it was a life or death situation and you had to traverse a vast, treacherous path, you would want the mule.

So what makes a company a pony or a mule?

Let’s start with the pony. Ponies focus on the vanity metrics. They talk about how much they raised, how they have the corporate swag, how fast they are growing (while failing to talk about their burn), where their office is located, and which top-tier VC invested in them. They are the companies that if they make it, they make it, then they make it BIG. But, if they fail, then everyone involved looks like a complete goof ball.

Mules on the other hand tend to have slower, more sustainable growth. They don’t always get the corporate swag or the kombucha on-tap in the office, but they tend to be a lot more reliable. Mules are the brands that don’t raise a ton of money, but the money they do raise they focus in the highest impact areas, rather than burning it for the sake of burning it.

This isn't to say ponies can’t have mule qualities. The greatest companies are a combination of the two. Companies that are well capitalized, but focus on investing their money in areas that will make them more money, rather than the vanity metrics. It Is better to be born a mule and develop positive pony qualities as you scale (Ie. hiring top-talent, taking calculated risks, R&D), because once you are a member of the struggle club® and see the absolute corporate degeneracy you will see what It means to be a true pony, and why It Is close to a death sentence.

But, what should you do if you are a pony?

The good news is that it is possible to develop mule qualities. Drill down into your finances, and ask yourself “if this money wasn't spent, would we still be in the same spot or a better spot?” You have to Identity the leak and cancel It. Limit the corporate swag. Maybe down size offices. Change corporate catering to 1 day per week, rather than 5. Stop burning money, for the sake of burning it. Use your money to make you more money, not less.

So, in conclusion, Pony<Mule< Muny (Mule-Pony)