4 ms·

Doesn't matter what they're called. If you're running a startup right now and have the option to be profitable vs pursue expensive growth, OP says now is the ti

by rgbrgb 11y ago

Doesn't matter what they're called. If you're running a startup right now and have the option to be profitable vs pursue expensive growth, OP says now is the time to choose profitability. The funding climate has changed and hence risk/reward ratio needs to be recalibrated. Whether this climate change is real or not is maybe up for debate but I'd guess that in most cases profitability is not orthogonal to growth. As a side note, getting profitable while maintaining growth would seem to put you in the best possible position to pursue more funding if you wanted it. Edit: I'll also add that according to pg's "Startup = Growth" [0], profitability doesn't really come into the definition. Hence the existence of bootstrapped startups. [0]: http://www.paulgraham.com/growth.html http://www.paulgraham.com/growth.html

roymurdock 11y ago
> Doesn't matter what they're called. It absolutely does matter. Important terms need to be well-defined before you can have any sort of intelligent conversation about them. This is a rule in academic research for a reason, it clears up a lot of unnecessary confusion and vitriol. Reframe this post as a bank talking to a small business owner about not taking on too much liability without proving a concept and it comes off as simple, sensible advice. > in most cases profitability is not orthogonal to growth It absolutely is. The longer you can offer a service for free, or for cost below margin, the more users you can attract to your business. It's pretty simple economics - build a nice free garden, let people play in it and invite their friends, get investments to pay your operating costs while improving the garden, keeping it open and free, then close it off and advertise once your ecosystem is strong enough to prevent substantial churn. This is not to say that all companies follow this path, but high growth companies certainly tend to, as it gives them a huge monopolistic advantage by putting profitability off into the future.
- mindcrime 11y ago
  Important terms need to be well-defined before you can have any sort of intelligent conversation about them. But the term "startup" isn't well-defined. Just go back through the history of the (many) debates on this very point here on HN. Sure, you could just declare pg the ultimate arbiter of all things startup, and use his definition; but there still isn't really industry-wide agreement on it. I would argue that "startup" by itself just doesn't convey enough information and that it needs additional qualifiers to be useful. "VC funded startup" vs "bootstrapped startup" or "retail startup" vs. "tech startup", etc. Words exist, let's not be scared to use as many as we need to be precise.
ritchiea 11y ago
When did the funding market change?
- nostrademons 11y ago
  Q4 2015.

by rgbrgb 11y ago

roymurdock 11y ago

> Doesn't matter what they're called. It absolutely does matter. Important terms need to be well-defined before you can have any sort of intelligent conversation about them. This is a rule in academic research for a reason, it clears up a lot of unnecessary confusion and vitriol. Reframe this post as a bank talking to a small business owner about not taking on too much liability without proving a concept and it comes off as simple, sensible advice. > in most cases profitability is not orthogonal to growth It absolutely is. The longer you can offer a service for free, or for cost below margin, the more users you can attract to your business. It's pretty simple economics - build a nice free garden, let people play in it and invite their friends, get investments to pay your operating costs while improving the garden, keeping it open and free, then close it off and advertise once your ecosystem is strong enough to prevent substantial churn. This is not to say that all companies follow this path, but high growth companies certainly tend to, as it gives them a huge monopolistic advantage by putting profitability off into the future.

mindcrime 11y ago
Important terms need to be well-defined before you can have any sort of intelligent conversation about them. But the term "startup" isn't well-defined. Just go back through the history of the (many) debates on this very point here on HN. Sure, you could just declare pg the ultimate arbiter of all things startup, and use his definition; but there still isn't really industry-wide agreement on it. I would argue that "startup" by itself just doesn't convey enough information and that it needs additional qualifiers to be useful. "VC funded startup" vs "bootstrapped startup" or "retail startup" vs. "tech startup", etc. Words exist, let's not be scared to use as many as we need to be precise.

ritchiea 11y ago

When did the funding market change?

nostrademons 11y ago
Q4 2015.