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Is there any growing startup that's not bleeding money? Isn't what the seed and Series A and maybe B funding is about? After series A funding I'd expect some re

Is there any growing startup that's not bleeding money? Isn't what the seed and Series A and maybe B funding is about? After series A funding I'd expect some revenue stream, but not enough to pay expenses, after B series, they should have a plan to profitability and some proven customers that show that they can actually get that revenue, and after C I'd expect them to be executing to that plan. If bleeding money scares you, then a startup is probably not the right fit, a huge number of startups fail.

enra 4y ago
There are. It happens when you hit high level of product market fit with a lean team and don’t go on a massive hiring spree after but keep growing the team at a measured pace. I think Github, Notion, Retool, Slack, probably Figma, hit revenues quite quickly as they launched and became profitable or at least close to breakeven.
- Johnny555 4y ago
  You mention Slack, but they had losses of $140M/year prior to IPO: Slack says it may not turn profitable; IPO filing reveals $139 million in losses, Microsoft primary competitor The Slack IPO filing shows annual revenue of $400.5 million, up 60% from the prior year, with a net loss of $138.9 million, for the 12-month period that ended Jan. 31. Slack's actual fiscal year-end date has yet to be determined.
  - kenrik 4y ago
    Slack grew their workforce too quickly. Actually the Slack I remember from when it first came out is more or less the same product they have now. I'm not really sure what all of those people were doing for all of those years.
    - worik 4y ago
      Why slack? I never understood. I never liked IRC. But to not like it and pay for it? I do not understand. Am I a fossil?
      - Johnny555 4y ago
        Most people don't get to choose, in my case, it's our corporate IM system, so I have to use it whether I want to or not. It's got a lot of enterprise features that companies like, like SSO integration, message retention policies, security certifications like HIPAA and FedRAMP, and more. There are also a lot of pre-made apps for integrating with corporate apps like Jira, Gmail, Salesforce, etc. It's fine, I haven't looked at a lot of other options, but it seems more usable than Google Hangouts (or messenger or whatever they call it now) or Microsoft Teams.
        worik 4y ago
        > Most people don't get to choose Is that a case of business people making technical decisions? That I understand. Do not like, but I understand
        Johnny555 4y ago
        There was some technical evaluation done, but some features like retention policies and SSO were deemed requirements. Not sure what all of the criteria were or what all of the candidates were, it was a while ago.
        llbeansandrice 4y ago
        The big sells for Hangouts and Teams is that they have video. Slack doesn't so you have to find a video conference provider as well like Zoom. Also Teams integrates more easily with the existing Microsoft stack (office, outlook, etc.) that a ton of non-tech companies are on. I think a lot of tech companies struggle to break into the non-tech world. Slack might be ubiquitous for SWEs but my SO who works in traffic engineering will probably never use it (they use Teams).
    - jokethrowaway 4y ago
      It's definitely turned into a slow behemoth. I remember it being snappy in the early days and everyone wanted to use it.
    - ZephyrBlu 4y ago
      You realize that there is a lot of stuff that goes on behind the scenes, right? They need to scale their systems, maintain reliability, scale their processes, build internal tools, run experiments, work with 'legacy' code and within the existing architecture, etc. It's not surprising product development has slowed down. In almost all cases it seems like the speed of product development is asymptotic.
      - disgruntledphd2 4y ago
        Hiring too many people is still the number one thing that can kill your growing business. The communication costs alone eat a bunch of headcount so if you don't desperately need the people then you shouldn't hire them. The problem generally starts when you hire a bunch of people without fixing broken processes first, these people then push back against fixing said processes, and the rot sets in.
potatolicious 4y ago
You're right - it's pretty definitionally hard for businesses to be profitable early on. The problem is that this unprofitable period has been extended towards ludicrous ends. It used to be that you spend your Series A and B figuring out the business, and from Series C forward you've got your unit economics dialed in and are just pushing the "growth" button as hard as you can. Nowadays you get all the way to IPO without ever achieving positive unit economics: Uber, Lyft, DoorDash... You have companies raising (or trying to raise) Series E, F, G while they lose money on every transaction and make it up in volume. I suspect OP is talking more about that phenomenon - companies that are way too far along to not have positive unit economics on their core business.

enra 4y ago

There are. It happens when you hit high level of product market fit with a lean team and don’t go on a massive hiring spree after but keep growing the team at a measured pace. I think Github, Notion, Retool, Slack, probably Figma, hit revenues quite quickly as they launched and became profitable or at least close to breakeven.

Johnny555 4y ago
You mention Slack, but they had losses of $140M/year prior to IPO: Slack says it may not turn profitable; IPO filing reveals $139 million in losses, Microsoft primary competitor The Slack IPO filing shows annual revenue of $400.5 million, up 60% from the prior year, with a net loss of $138.9 million, for the 12-month period that ended Jan. 31. Slack's actual fiscal year-end date has yet to be determined.
- kenrik 4y ago
  Slack grew their workforce too quickly. Actually the Slack I remember from when it first came out is more or less the same product they have now. I'm not really sure what all of those people were doing for all of those years.
  - worik 4y ago
    Why slack? I never understood. I never liked IRC. But to not like it and pay for it? I do not understand. Am I a fossil?
    - Johnny555 4y ago
      Most people don't get to choose, in my case, it's our corporate IM system, so I have to use it whether I want to or not. It's got a lot of enterprise features that companies like, like SSO integration, message retention policies, security certifications like HIPAA and FedRAMP, and more. There are also a lot of pre-made apps for integrating with corporate apps like Jira, Gmail, Salesforce, etc. It's fine, I haven't looked at a lot of other options, but it seems more usable than Google Hangouts (or messenger or whatever they call it now) or Microsoft Teams.
      - worik 4y ago
        > Most people don't get to choose Is that a case of business people making technical decisions? That I understand. Do not like, but I understand
        Johnny555 4y ago
        There was some technical evaluation done, but some features like retention policies and SSO were deemed requirements. Not sure what all of the criteria were or what all of the candidates were, it was a while ago.
      - llbeansandrice 4y ago
        The big sells for Hangouts and Teams is that they have video. Slack doesn't so you have to find a video conference provider as well like Zoom. Also Teams integrates more easily with the existing Microsoft stack (office, outlook, etc.) that a ton of non-tech companies are on. I think a lot of tech companies struggle to break into the non-tech world. Slack might be ubiquitous for SWEs but my SO who works in traffic engineering will probably never use it (they use Teams).
  - jokethrowaway 4y ago
    It's definitely turned into a slow behemoth. I remember it being snappy in the early days and everyone wanted to use it.
  - ZephyrBlu 4y ago
    You realize that there is a lot of stuff that goes on behind the scenes, right? They need to scale their systems, maintain reliability, scale their processes, build internal tools, run experiments, work with 'legacy' code and within the existing architecture, etc. It's not surprising product development has slowed down. In almost all cases it seems like the speed of product development is asymptotic.
    - disgruntledphd2 4y ago
      Hiring too many people is still the number one thing that can kill your growing business. The communication costs alone eat a bunch of headcount so if you don't desperately need the people then you shouldn't hire them. The problem generally starts when you hire a bunch of people without fixing broken processes first, these people then push back against fixing said processes, and the rot sets in.

potatolicious 4y ago

You're right - it's pretty definitionally hard for businesses to be profitable early on. The problem is that this unprofitable period has been extended towards ludicrous ends. It used to be that you spend your Series A and B figuring out the business, and from Series C forward you've got your unit economics dialed in and are just pushing the "growth" button as hard as you can. Nowadays you get all the way to IPO without ever achieving positive unit economics: Uber, Lyft, DoorDash... You have companies raising (or trying to raise) Series E, F, G while they lose money on every transaction and make it up in volume. I suspect OP is talking more about that phenomenon - companies that are way too far along to not have positive unit economics on their core business.