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You are right, and this is a decent analogy, but isn't it a lot easier to say: Look at YE 2021, they spent $140 mill on sales and marketing. Next year they cou
by danielmarkbruce 5y ago
You are right, and this is a decent analogy, but isn't it a lot easier to say:
Look at YE 2021, they spent $140 mill on sales and marketing. Next year they could turn that down to $20 million and they would be instantly profitable and almost certainly grow a little bit too. They could also likely slash R&D and G&A by 30-40% without affecting current products. They are very valuable as is, but growing significantly (which isn't free) makes them even more valuable (most likely).
- pertymcpert 5y agoYour explanation had roughly the same number of words but included multiple figures and acronyms while saying the same thing. I don't think that's easier.
- tptacek 5y agoIt's more explicit! You had to take my word for the nickels->dimes machine.
- danielmarkbruce 5y agoYou are right, "easier" is not the right word.
- jonstewart 5y agoGiven their proven track record with new products, it makes a lot of sense to keep spending on R&D. Mostly they’re a classic enterprise software business (with developer-led marketing) and so the wider array of products they have to sell, the better their future cash flow will be with subscriptions/maintenance. $100M and $1B in annual revenue tend to be important thresholds in the enterprise software biz, and they’re well past $100M. G&A will of course get wrung out by professional managers.