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I think Amazon is one of the rare examples where it paid off. They were making losses in exchange for extreme growth in many sectors.
by MichaelApproved 7y ago
I think Amazon is one of the rare examples where it paid off. They were making losses in exchange for extreme growth in many sectors.
- kmonsen 7y agoAmazon made very controlled losses, and it was clear the core business was good and they were investing in new ideas. Sort of like alphabet except much bigger.
- anongraddebt 7y agoCorrect me if I'm wrong, but Amazon was strongly cash flow positive as of 2002. Moreover, their operations were throwing off cash the year they went public (1997). Everyone should be considering this a bit more because it says something about the irrationality of the current market. Large VC funds were investing under the thesis that some of the current crop of (now) less than impressive unicorns could follow the Amazon model: invest in growth at the expense of net income. These unicorns haven't simply failed to produce positive net income by intentionally following the Amazon model, rather they've simply burned through mountains of cash following less than impressive business models. They never followed the Amazon model to begin with.