4 ms·

Isn’t your second sentence just a truism on the first sentence? profit = revenue - costs

by dfee 5y ago

alberth 5y ago
Maybe a better way of saying what I meant is, gitlab is losing more than 2x their total generated. That’s what seems scary.
- joering2 5y ago
  It is also somewhat easy to enter the market. You do not need a hundred million dollars upfront investment to build a competitor, at least in terms of functionality of provided services. A good example in my opinion is how BitMart is eating up Coinbase US market with many of my friends moving on to safe money on the fees since "crypto is crypto". From their IPO coinbase is 25% down as of today, and I don't see any compelling reasons for the stock to rebounce.
deleted 5y ago
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jpollock 5y ago
he means losses > revenue, in other words costs > 2xrevenue.
beeneuf 5y ago
No, you're conflating "loss" (negative profit) with "cost". The first sentence acknowledges that plenty of tech companies IPO and are not profitable, so their revenue is below their costs. The second sentence is about losses (negative profit) exceeding revenue. For a naive example, a company can have $1m in revenue and $1.1m in costs, therefore profit is negative 100,000 dollars - the company is unprofitable. However, they are not losing more money ($100,000) then they are bringing in ($1,000,000 is greater than $100,000) - though they are spending more money ($1.1m) then they are bringing in. This would not be a concerning amount of loss, many companies are deliberately outspending current revenue in order to increase future revenue/growth/market share, but could become profitable if they wanted to. In this case, the person you replied to is remarking that the losses/negative profit ($192m, $130m) are greater than the revenue ($152m, $81m). This is a concerning sign, as the path to profitability is much further away.
OJFord 5y ago
First sentence: 'I realise many ... profit < 0' Second sentence: 'Seems scary ... profit < -revenue'

Isn’t your second sentence just a truism on the first sentence? profit = revenue - costs

by dfee 5y ago

Isn’t your second sentence just a truism on the first sentence? profit = revenue - costs

Maybe a better way of saying what I meant is, gitlab is losing more than 2x their total generated. That’s what seems scary.

joering2 5y ago
It is also somewhat easy to enter the market. You do not need a hundred million dollars upfront investment to build a competitor, at least in terms of functionality of provided services. A good example in my opinion is how BitMart is eating up Coinbase US market with many of my friends moving on to safe money on the fees since "crypto is crypto". From their IPO coinbase is 25% down as of today, and I don't see any compelling reasons for the stock to rebounce.

deleted 5y ago

[deleted]

jpollock 5y ago

he means losses > revenue, in other words costs > 2xrevenue.

beeneuf 5y ago

No, you're conflating "loss" (negative profit) with "cost". The first sentence acknowledges that plenty of tech companies IPO and are not profitable, so their revenue is below their costs. The second sentence is about losses (negative profit) exceeding revenue. For a naive example, a company can have $1m in revenue and $1.1m in costs, therefore profit is negative 100,000 dollars - the company is unprofitable. However, they are not losing more money ($100,000) then they are bringing in ($1,000,000 is greater than $100,000) - though they are spending more money ($1.1m) then they are bringing in. This would not be a concerning amount of loss, many companies are deliberately outspending current revenue in order to increase future revenue/growth/market share, but could become profitable if they wanted to. In this case, the person you replied to is remarking that the losses/negative profit ($192m, $130m) are greater than the revenue ($152m, $81m). This is a concerning sign, as the path to profitability is much further away.

OJFord 5y ago

First sentence: 'I realise many ... profit < 0' Second sentence: 'Seems scary ... profit < -revenue'