Maximum Efficiency Ratio

This week in the startup we were dealing with none other than what type of marketing we could do with our limited budget and resources.  I’m sure most startups deal with this situation as well, and thinking through this situation I came up on an idea for the Maximum Efficiency Ratio (or MER).

MER is a mental model to question every decision based on the maximum efficiency one unit of labor, investment, or something can produce.  For example, in the case of social media marketing, the MER framework would question the efficiency of £1 spent on say, Facebook or Twitter marketing.  So if the objective is to maximize the number of followers on each respective social network, MER would analyze the number of followers gained/£1 investment, and the higher of the ratio would be the course of action advocated.

Some could say that this is simply ROI; well, that’s wrong.  MER is a way of thinking - whether that is labor, investment, or something else.  For example, when packing a suitcase, higher MER products would be prioritized over lower MER products.  This means that an electrical plug with 5 different sockets would be better than a 2 socket plug; instead of bringing a piece of clothing that can only be worn for one occasion, a piece of clothing that can be worn for multiple occasions would be better.

If you read Tim Ferriss’s book and observe his life, you’d find that he lives his life with this model.  Everything is done for the sake of maximizing efficiency, whether it be packing, working, or even dancing.

So take a page out of his book (and my blog :) )- adopt the MER mentality for your startup.