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Ask HN: Do investors prefer high growth rate, or nailed/scalable business model?
For the sake of argument, let’s say “high growth rate” = 100k new users/month for something generic and consumer web-like. Maybe a photo sharing app or social news app.
Business model nailed means bringing in 15k/month in revenue in a big market with obvious potential scale quickly.
- prostoalex 12y agoUnless the high growth business is in some magical new sector, it's not too hard to figure out what the business model will be - you're going to sell ads, and figure out native monetization options. Therefore a high growth business (like Twitter or Pinterest) is very predictable once certain numbers kick in. Scalable business model is a turn on to some investors (Benchmark likes to fund marketplaces, after their home run with eBay and now Uber), but there's always some unknowns - like your return policy doesn't scale, you need more customer service staff than you originally planned, a dozen of competitors emerge, or Google adds your business model as a side feature to one of their products.