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This is one of those things that really mystifies me. We always hear about startups, killer apps, etc. that generally target a fat margin, even the cloud provid
by PhilipRoman 2y ago
This is one of those things that really mystifies me. We always hear about startups, killer apps, etc. that generally target a fat margin, even the cloud providers with economies of scale are doing everything they can to avoid becoming a "dumb pipe", but at the same time in the background there are a bunch of companies which somehow make e.g. manufacturing matchsticks profitable. What is their secret?
- zensavona 2y agoTheir secret is volume
- christkv 2y agoVolume
- IneffablePigeon 2y agoTheir secret is not having delusions of grandeur. VC convinces us that a business is not a success unless it eats the world within ten years. In actual fact, many businesses make a very modest profit and took decades to get big enough you might consider them a success story. That’s fine. Shareholder value is not the only kind of value.
- 4ndrewl 2y agoNot starting out with $500 million VC debt?
- TylerE 2y agoAnd not needing to somehow show 50% growth year after year.
- t-3 2y ago"Profitable" is just a calculation of inputs and outputs, what it actually looks like varies wildly. Manufacturing and tech/service industry and infrastructure are totally different types of business, often with radically different types of startup costs, cashflow, growth patterns, ownership models and employee compensation expectations.