---
title: "Frugal, Not Cheap"
section: "Operational Excellence"
sectionId: "operational-excellence"
date: "2026-05"
---

## There Is a Critical Difference

Being frugal and being cheap are not the same thing. One is a discipline that preserves capital; the other is a false economy that destroys talent and trust.

## What Cheap Looks Like

Cheap is penny-wise and pound-foolish. Examples:

- Losing a stellar employee because you refused to give them a raise
- Being overly tight with early employee equity (a common complaint cited by founders like Taso Du Val of TopTal)
- Paying salaries late
- Haggling on price for things that do not meaningfully move the needle

These behaviours signal that you do not value the people around you. They cost you far more in turnover and morale than you ever saved.

## What Frugal Looks Like

Frugal is knowing exactly where every pound and dollar goes — and refusing to waste it on things that do not drive growth.

If you are **not** wildly profitable, you should not be spending on:

- Fancy office space
- Daily catered lunches
- Unlimited snacks and perks

## The WeWork Warning

The canonical example of reckless spending: **Adam Neumann bought a $60M private jet** while WeWork was on pace to lose **$1.9 billion** in 2018.

That kind of spending does not just waste capital — it sets a cultural tone that normalises excess across the entire organisation. The founder's behaviour is the company's behaviour.

## The Rule

Spend generously on the things that make your people more effective and your product better. Save ruthlessly on everything else.