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> Foursquare is on the path to $100 million in revenue, and profits are within sight for the first time. Serious question: how is a software company that's bri

> Foursquare is on the path to $100 million in revenue, and profits are within sight for the first time. Serious question: how is a software company that's bringing in $100MM a year without any substantial overhead in terms of physical manufacturing or shipping or similar real-world expenses not profitable. As far as I can tell, they'd have to have infrastructure costs well into the double digit millions yearly and/or 450+ employees on payroll, neither of which is true as far as I can tell (regardless of how prudent either would be for them).

joeldg 10y ago
they gotta buy articles like this
TeeJay942 10y ago
The article says "Foursquare is on the path to $100 million in revenue", so they might be nowhere nearly that level. But I would think their largest costs are salary and servers. Like most startups building a mass of users (e.g. Twitter), they have likely been optimizing for growth as quickly as possible. Which means spending all revenue/investment on getting customers, etc. and delaying focus on turning a profit until some future time (e.g., as the acceleration of growth slows).
SeoxyS 10y ago
Let's do some quick napkin math. Foursquare has 286 employees[1], let's say the average salary is $120k, representing ~$180k fully-loaded cost. And there you already have a ~$51MM cost. [1]: https://equidateinc.com/company/foursquare https://equidateinc.com/company/foursquare
- orf 10y ago
  120k for each and every employee? And none of them mention they shouldn't be spending $50,000,000 a year on... infrastructure (aws I'm assuming)?
  - SeoxyS 10y ago
    Probably a sales- and engineering- heavy team; many of whom will be earning $150k+. Executives are probably making $300k+. This should bring up the average salary at the company. Also, this is just one line-item. There's a lot more expenses to running a business. I wouldn't be surprised to see them close to $80M+ a year. The article didn't exactly say their revenues were $100M, just that it was "well on its way" there.

joeldg 10y ago

they gotta buy articles like this

TeeJay942 10y ago

The article says "Foursquare is on the path to $100 million in revenue", so they might be nowhere nearly that level. But I would think their largest costs are salary and servers. Like most startups building a mass of users (e.g. Twitter), they have likely been optimizing for growth as quickly as possible. Which means spending all revenue/investment on getting customers, etc. and delaying focus on turning a profit until some future time (e.g., as the acceleration of growth slows).

SeoxyS 10y ago

Let's do some quick napkin math. Foursquare has 286 employees[1], let's say the average salary is $120k, representing ~$180k fully-loaded cost. And there you already have a ~$51MM cost. [1]: https://equidateinc.com/company/foursquare https://equidateinc.com/company/foursquare

orf 10y ago
120k for each and every employee? And none of them mention they shouldn't be spending $50,000,000 a year on... infrastructure (aws I'm assuming)?
- SeoxyS 10y ago
  Probably a sales- and engineering- heavy team; many of whom will be earning $150k+. Executives are probably making $300k+. This should bring up the average salary at the company. Also, this is just one line-item. There's a lot more expenses to running a business. I wouldn't be surprised to see them close to $80M+ a year. The article didn't exactly say their revenues were $100M, just that it was "well on its way" there.