5 ms·
I'd like to point out the most important equation in all of business: Revenue - Costs = Profit. Too many in the valley subscribe to the Venture Capital + Grow
by Mystalic 18y ago
I'd like to point out the most important equation in all of business:
Revenue - Costs = Profit.
Too many in the valley subscribe to the Venture Capital + Growth = Profit mindset.
You think you can go years without funding, but then a disaster happens, or a new competitor rises, or costs to use SMS suddenly increase. Then what do you do?
- dshah 18y agoActually, I think the equation is more like: Venture Capital + Growth + Acquisition = "Success" I don't think profits enter into the equation at all. (Unless you're talking about the shareholders making a profit).
- vaksel 18y agoyeah most investors seem to be investing to flip, not to build a long term business
- ojbyrne 18y agoActually more relevant to this specific case is: ROI = discounted value of expected future cash flows. It's not good enough to be profitable 10 years from now, unless the profit is much, much larger than the losses in the previous 9 years.