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The biggest reason why we don’t see support and services companies achieving hyper-growth is that they are uninvestable. Annual revenues are low and nonrecurrin
by weare138 4y ago
The biggest reason why we don’t see support and services companies achieving hyper-growth is that they are uninvestable. Annual revenues are low and nonrecurring, and margins are tight. VCs are looking for 80%+ gross margins and hockey stick growth.
In other words, Red Hat's model doesn't work for Wall St and VCs looking to make quick easy money riding out the next tech 'unicorn'. Red Hat has survived and thrived for 30 years now, while most modern VC backed tech companies are lucky to make it past 3. The infiltration of Silicon Valley VC vultures was one of the worst things to happen to the tech industry and why we rarely see sustainable startups like Red Hat anymore.
- KennyFromIT 4y agoI don't think this can be overstated enough. The incentives for vc-backed companies these days don't align with this model, hence the reason it's not more widely in use.
- scaramanga 4y agoAnd a very good argument for taxing that money out of their hands and investing it into productive enterprises that spur actual innovation and gainful employment.
- JadedEngineer 4y agoIt's almost like building a company slowly, within your means, and focusing on improving the product, is the wrong way to do it these days. Better go with some BS that's flashy, make big claims and promises, and try to get some of that sweet VC money!