4 ms·
Talking about revenue without one word about profits.
by andrefuchs 5y ago
Talking about revenue without one word about profits.
- notabanker 5y agoI knew a startup founder who was spending 10-15K Euros on marketing each month. He knew the startup was a dead-end but had raised money and wanted a "managed X million $ budget" bullet point on his resume so he could apply for high-level job positions later on. It came down to fundraising for resume building.
- muzani 5y agoEveryone raising money is expected to be unprofitable, no?
- notabanker 5y agoUnprofitability is rampant among public software companies: https://survivingtomorrow.org/why-do-so-many-famous-companies-lose-billions-every-year-3aa648ddc9d6?gi=4b877b6104cd https://survivingtomorrow.org/why-do-so-many-famous-companie... Wonder if you have an opinion -- has unprofitability always been this pervasive or is this how businesses are generally run?
- muzani 5y agoTech companies are focused around asset growth, which is more easily converted to profit. The profit margins are usually huge, so profiting is rarely ever the problem. Revenue usually is. They have a lot of cash and it's easy to cut costs too. From the linked article, it says, "In 2018, 81% of U.S. companies were unprofitable in the year leading up to their public offerings." This is the most unfair way of judging it. This is like saying students have a negative net worth a year before graduation. It's missing the point - students take debt so they can make much more money later. Startups go cash heavy and take losses so they can make money after the exit.
- notabanker 5y agoThanks a lot for sharing your wisdom. A counterintuitive yet better way to understand how modern business works.