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You could argue the opposite. what's the point of great margins if you have no scale? look at the Amazon example. they were unprofitable for a very very long
by hackernewds 4y ago
You could argue the opposite. what's the point of great margins if you have no scale?
look at the Amazon example. they were unprofitable for a very very long time. and the retail business is still very miniscule margins
- Apocryphon 4y agoIsn't the Amazon the exception that proves the rule
- throwaway0a5e 4y agoAmazon never made any profit because they were always reinvesting. If they had scaled back to "normal business" levels of ambition at any point they'd have been "normal business" levels of profitable.
- swatcoder 4y ago> what's the point of great margins if you have no scale Profit? Niche ownership? Reliability? Durability? Expertise? It makes sense to worship the Church of Scale in a VC-adjacent forum like HN, but it’s not the only way to business.
- scarface74 4y agoPlease don’t use the “look at Amazon” example. Amazon had positive margins early on and was using cash to buy and build real assets. Amazon also pivoted to an entirely different business where most of its profit comes from - AWS. No, AWS wasn’t born from Amazon selling excess capacity. That’s just like saying that if every company rehired its first CEO it could be worth multiple trillions.
- mupuff1234 4y agoThe point of profit is profit. The whole premise of the VC/PE business is profits, just with different risk strategies.
- rchaud 4y agoProfit for who? All VCs want is for the company to IPO, because that's when they can get their money back with a nice profit. The company itself doesn't have to be anywhere near profitability to IPO. Look at Uber, Airbnb, Dropbox, etc.
- scarface74 4y agoVCs don’t care about profit. They only care about selling to the “greater fool” at unrealistic valuations.
- deleted 4y ago[deleted]