Why wouldn't sacrificing profit for growth make sense for Etsy? This is also just a theory, but this could be perhaps why many web companies choose to pursue g

Why wouldn't sacrificing profit for growth make sense for Etsy? This is also just a theory, but this could be perhaps why many web companies choose to pursue growth over profit: if you want to attract the brighest developers, you have to give them interesting problems to solve. A simplistic webapp could be profitable with a small userbase, but they wouldn't have the challenges (scalability, search relevance, machine learning for ad targeting and collaborative filtering) that could attract a top-notch engineering team. Entrepreneurial hackers are quite different from most business owners in their motivations are quite different. Top technical talent usually isn't very motivated by money alone and hates being underutilized. A small (even profitable) business wouldn't generate that much money for developers anyway. Founders could find a way to cash out from dividends, but that would leave employee engineers with nothing (or at the least, with nothing more than what four years of routine bonuses at Google would bring) to show for years of working long hours on tedious and technically un-interesting problems (which many times still happen to be the problems that customers want solved). A competitor could delay profitability in the short term, attracting not only a large user base but also a talented team that could execute on a much more scalable monetization approach (e.g. self-serve advertising vs. brand advertising, SMB/consumer products vs. enterprise products). Incidentally, from what I've heard, before Facebook began seeing serious growth and went beyond being a simple database driven web application (appearance of Thrift and the ability to write back-end services in Python, C++ and Java), they had high turnover in engineering. I'd imagine the fact that they were recruiting top talent but putting them to work on routine web development contributed a lot to that. Of course with the scale Facebook operates at now, the simplest web development tasks are quite challenging. That being said, companies that start out solving "unsexy" but financially lucrative problems could grow to be billion dollar companies (e.g. SAP). Philip Greenspun has a really interesting piece on this topic (see the third "good reason to start a startup"): http://philip.greenspun.com/business/startup-tips/ http://philip.greenspun.com/business/startup-tips/ Question is, what would these start-ups have to do to attract talented technical employees (as opposed to founders, who have the lure of "fuck you money" or talented sales/marketing employees who are passionate about customer building a profitable pipeline and closing valuable deals)?