3 ms·

The thing I wonder about is what does all these startups ARR look like when everyone's budget dries up and/or there are no startups to buy your startups neat(bu

The thing I wonder about is what does all these startups ARR look like when everyone's budget dries up and/or there are no startups to buy your startups neat(but not needed) software.

RexM 4y ago
I’m wondering what the ARR looks like now. I read here on HN that Bolt had $40m in revenue last year with an $11b valuation. I have no idea if that revenue number is real, or if I’m misremembering.
- imachine1980_ 4y ago
  Revenue isn't profit, you can have higher revenue if you spend 100 dollars to get 90 dollar return, this is the problem right now much companies allow to spend well over what they should, maybe bolt should be a 40 employes companies not 900(linkedin), and a marketing budget of 10 millions not 100 million (no data here)
  - foobiekr 4y ago
    Uber has been the king of this approach for years. Subsidized rides.
    - nbstme 4y ago
      Good for us as consumers, not for Uber biz haha!
    - solarkraft 4y ago
      It's impressive for how long they've been able to do this.
  - nbstme 4y ago
    Yes! If you were raising at 100x ARR it means that $1 of ARR generated $100 of market value. In that sense, it made sense to burn $100 to acquire $1 of revenue. Of course, when the reversion to the mean hit and companies trade at 7x ARR, it doesn't make sense to spend that much. Unfortunately, most startups won't be able to adapt their expenses to this new environment.
  - solarkraft 4y ago
    For sure, but that means their profit is definitely below 40M$.
ebiester 4y ago
A word processor and spreadsheet is necessary. Everything else is optional. The question isn't "is it neat?" The question is does the money expended save more than if a human performed the equivalent labor? Does Confluence and Jira save more money than having a human librarian and project manager manually tracking the status of projects? There will always be room for "neat" software that replaces necessary human labor costs. If you can allow a team of 5 to do what used to take a team of 10, you will be able to sell that for the equivalent of the fully loaded cost of 3-4 people. Do that for enough people and you have a successful business.
- sharemywin 4y ago
  I'm talking about second order effects. if the company you no longer saved money for don't have a business need to slash money left and right you may have a problem. If you have software related to mortgage companies you might have a problem in this market.
nbstme 4y ago
Interesting take! I agree that we will all reevaluate the software we are paying for and get rid of "nice to have". If companies fire employees in means software businesses will sell fewer "seats" per customer. The average revenue per customer might decline.

The thing I wonder about is what does all these startups ARR look like when everyone's budget dries up and/or there are no startups to buy your startups neat(but not needed) software.

RexM 4y ago

I’m wondering what the ARR looks like now. I read here on HN that Bolt had $40m in revenue last year with an $11b valuation. I have no idea if that revenue number is real, or if I’m misremembering.

imachine1980_ 4y ago
Revenue isn't profit, you can have higher revenue if you spend 100 dollars to get 90 dollar return, this is the problem right now much companies allow to spend well over what they should, maybe bolt should be a 40 employes companies not 900(linkedin), and a marketing budget of 10 millions not 100 million (no data here)
- foobiekr 4y ago
  Uber has been the king of this approach for years. Subsidized rides.
  - nbstme 4y ago
    Good for us as consumers, not for Uber biz haha!
  - solarkraft 4y ago
    It's impressive for how long they've been able to do this.
- nbstme 4y ago
  Yes! If you were raising at 100x ARR it means that $1 of ARR generated $100 of market value. In that sense, it made sense to burn $100 to acquire $1 of revenue. Of course, when the reversion to the mean hit and companies trade at 7x ARR, it doesn't make sense to spend that much. Unfortunately, most startups won't be able to adapt their expenses to this new environment.
- solarkraft 4y ago
  For sure, but that means their profit is definitely below 40M$.

ebiester 4y ago

A word processor and spreadsheet is necessary. Everything else is optional. The question isn't "is it neat?" The question is does the money expended save more than if a human performed the equivalent labor? Does Confluence and Jira save more money than having a human librarian and project manager manually tracking the status of projects? There will always be room for "neat" software that replaces necessary human labor costs. If you can allow a team of 5 to do what used to take a team of 10, you will be able to sell that for the equivalent of the fully loaded cost of 3-4 people. Do that for enough people and you have a successful business.

sharemywin 4y ago
I'm talking about second order effects. if the company you no longer saved money for don't have a business need to slash money left and right you may have a problem. If you have software related to mortgage companies you might have a problem in this market.

nbstme 4y ago

Interesting take! I agree that we will all reevaluate the software we are paying for and get rid of "nice to have". If companies fire employees in means software businesses will sell fewer "seats" per customer. The average revenue per customer might decline.