4 ms·

"If you show revenue, people will ask 'HOW MUCH?' and it will never be enough. The company that was the 100xer, the 1000xer is suddenly the 2x dog. But if you h

"If you show revenue, people will ask 'HOW MUCH?' and it will never be enough. The company that was the 100xer, the 1000xer is suddenly the 2x dog. But if you have NO revenue, you can say you're pre-revenue! You're a potential pure play... It's not about how much you earn, it's about how much you're worth. And who is worth the most? Companies that lose money!" https://www.youtube.com/watch?v=BzAdXyPYKQo https://www.youtube.com/watch?v=BzAdXyPYKQo

Disruptive_Dave 11y ago
Out of every scene in those two seasons, no sentiment captured what I've witnessed in startups as precisely as this one. Straight up perfect. I wonder who was the main advisor for that speech (this was pre-Dick Costolo, I believe).
- throwawayank333 11y ago
  It is a ridiculous sentiment, but my startup has had revenue from early on, and I've talked to investors who have wanted to value us on revenue multiples because of that - whereas without having any revenue they would have taken a guess at our potential. (They'd have had to, they can't apply a multiple to $0!) It's stupid, $2000/month in revenue shouldn't mean you are valued at less than if you had $0/month, but I can understand why some founders don't want to have any at all - in order to not have the more silly investors be distracted by looking at it. There is a little truth to what he's saying - Once you have more than $0 in revenue, you have to make that number go up every month to keep investors happy and have nice numbers to bring in new ones, which makes it harder for the startup to invest in longer term projects that could bring much more revenue but with a slower buildup.
  - api 11y ago
    I solve this by not wanting silly investors.
  - maehwasu 11y ago
    Anchoring is real.
anovikov 11y ago
I just hope that market adjustment will leave less of this shit around.
rpgmaker 11y ago
Huh, Gabe is on that show. How good is that tv show anyways? I've been meaning to binge watch it but it seems like its raison d'être is to take cheap shots at SV.
- ojbyrne 11y ago
  SV deserves some satire, and a lot of the shots aren't really that cheap, they're dead on.
- throwawayank333 11y ago
  It's very, very good. Mike Judge isn't the biggest fan of Silicon Valley, but he knows it well. (See Office Space for another example of that). It might seem like cheap shots if you have only seen short clips of it though.
  - mjevans 11y ago
    Office Space should be /required viewing/ in high school. That movie taught me more about what to expect in the typical American office than any other experience in my life.
    - slavik81 11y ago
      There's a brief clip of pornography near the beginning. We watched it on the bus ride for a high school trip. The teachers quickly turned it off upon noticing.
- Shengbo 11y ago
  I haven't heard any complaints, the humour is on point, the characters are great and it's even more amusing if you have some insight into how ridiculous certain things in real life SV are. This bit is definitely my favorite: https://www.youtube.com/watch?v=IJIAOosI6js https://www.youtube.com/watch?v=IJIAOosI6js
- michaelbuckbee 11y ago
  My non SV friends think that it's outlandish and unrealistic, my SF friends think it's close to a documentary.
ojbyrne 11y ago
And this article's "moon shots" are the new "pure plays."
nostrademons 11y ago
Also relevant: https://www.youtube.com/watch?v=s9Bg4UU76so https://www.youtube.com/watch?v=s9Bg4UU76so "I need you to start throwing off cash as quickly as possible." "But you said generating revenue was exactly what we shouldn't be doing." "But now that I'm spelling 'billion' with an 'm', I'm saying 'Do the exact opposite.'"
melted 11y ago
Same thing is easy to see in established companies: management is more inclined to throw piles of cash at businesses that don't make money while at the same time cutting costs in the "cash cow" divisions to show better growth numbers on the balance sheet.
tim333 11y ago
Nice speech though I note Snapchat and Pinterest that he says have no revenue presently each have of the order of $100m.

Disruptive_Dave 11y ago

Out of every scene in those two seasons, no sentiment captured what I've witnessed in startups as precisely as this one. Straight up perfect. I wonder who was the main advisor for that speech (this was pre-Dick Costolo, I believe).

throwawayank333 11y ago
It is a ridiculous sentiment, but my startup has had revenue from early on, and I've talked to investors who have wanted to value us on revenue multiples because of that - whereas without having any revenue they would have taken a guess at our potential. (They'd have had to, they can't apply a multiple to $0!) It's stupid, $2000/month in revenue shouldn't mean you are valued at less than if you had $0/month, but I can understand why some founders don't want to have any at all - in order to not have the more silly investors be distracted by looking at it. There is a little truth to what he's saying - Once you have more than $0 in revenue, you have to make that number go up every month to keep investors happy and have nice numbers to bring in new ones, which makes it harder for the startup to invest in longer term projects that could bring much more revenue but with a slower buildup.
- api 11y ago
  I solve this by not wanting silly investors.
- maehwasu 11y ago
  Anchoring is real.

anovikov 11y ago

I just hope that market adjustment will leave less of this shit around.

rpgmaker 11y ago

Huh, Gabe is on that show. How good is that tv show anyways? I've been meaning to binge watch it but it seems like its raison d'être is to take cheap shots at SV.

ojbyrne 11y ago
SV deserves some satire, and a lot of the shots aren't really that cheap, they're dead on.
throwawayank333 11y ago
It's very, very good. Mike Judge isn't the biggest fan of Silicon Valley, but he knows it well. (See Office Space for another example of that). It might seem like cheap shots if you have only seen short clips of it though.
- mjevans 11y ago
  Office Space should be /required viewing/ in high school. That movie taught me more about what to expect in the typical American office than any other experience in my life.
  - slavik81 11y ago
    There's a brief clip of pornography near the beginning. We watched it on the bus ride for a high school trip. The teachers quickly turned it off upon noticing.
Shengbo 11y ago
I haven't heard any complaints, the humour is on point, the characters are great and it's even more amusing if you have some insight into how ridiculous certain things in real life SV are. This bit is definitely my favorite: https://www.youtube.com/watch?v=IJIAOosI6js https://www.youtube.com/watch?v=IJIAOosI6js
michaelbuckbee 11y ago
My non SV friends think that it's outlandish and unrealistic, my SF friends think it's close to a documentary.

ojbyrne 11y ago

And this article's "moon shots" are the new "pure plays."

nostrademons 11y ago

Also relevant: https://www.youtube.com/watch?v=s9Bg4UU76so https://www.youtube.com/watch?v=s9Bg4UU76so "I need you to start throwing off cash as quickly as possible." "But you said generating revenue was exactly what we shouldn't be doing." "But now that I'm spelling 'billion' with an 'm', I'm saying 'Do the exact opposite.'"

melted 11y ago

Same thing is easy to see in established companies: management is more inclined to throw piles of cash at businesses that don't make money while at the same time cutting costs in the "cash cow" divisions to show better growth numbers on the balance sheet.

tim333 11y ago

Nice speech though I note Snapchat and Pinterest that he says have no revenue presently each have of the order of $100m.