4 ms·
Generally, being profitable precludes a company from getting "silly [high] valuations" & buzz in Silicon Valley. Unless they're really, really profitable. Big
by pud 14y ago
Generally, being profitable precludes a company from getting "silly [high] valuations" & buzz in Silicon Valley. Unless they're really, really profitable.
Big valuations usually stem from not knowing how much a company will make once they start charging for stuff. So the "it" crowd works itself into a frenzy and VCs take a big gamble.
But once you make a dollar, all the mystery is gone. You're judged & valued pretty much on your revenue alone. Which is usually low (startups are hard) and unsexy (so not a ton of buzz).
Not saying a agree with it. But that's how it is.
- FrojoS 14y agoInteresting. So "Lets not risk growth my premature monetization, like ads, which could repel early adopters." is often just an excuse to avoid income and thereby improve valuations?
- pyre 14y agoNot necessarily. The issue is that usually there is no roadmap beyond: 1. Explosive Growth 2. ??? 3. Profit!
- ahoyhere 14y agoIf it's totally a fantasy, it can be anything they want. The moment reality barges in, suddenly there's cold hard math to be done.