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>Amazon was founded in 1995 and became cash flow positive in 2002[1], seven years later. Thank you for the correction. My memory was faulty and Jeff Bezos act
by jasode 2y ago
>Amazon was founded in 1995 and became cash flow positive in 2002[1], seven years later.
Thank you for the correction. My memory was faulty and Jeff Bezos actually said, "we always had positive gross margins". Deep link: https://www.youtube.com/watch?v=zN1PyNwjHpc&t=36m11s https://www.youtube.com/watch?v=zN1PyNwjHpc&t=36m11s
The positive gross margins allowed enough discretionary use of cash to take out loans and service that debt. I just looked at the 1998 10k filing and the page on "Consolidated Statements of Cash Flows" has "Net cash provided by (used in) operating activities" of positive $31 million compared to negative -$6 million in 1996.
- nl 2y agoThe use of debt vs capital is interesting, but one isn't clearly better than the other. You can look at OpenAI's revenue as allowing them to raise investment capital. To invest in OpenAI is to bet that they won't need to keep investing more in hardware than they bring in. To me that doesn't seem a sure thing, but it isn't obviously wrong either. They are growing revenue very quickly and already have significant cashflow, and it isn't clear to me that they'll need to sustain the CapEx forever.