A dose of inspiration for your Monday morning

There are certain topics that even some of the smartest people I talk with who aren’t startup oriented can’t fully grok. One of them is whether profitability matters. It’s common cocktail party chatter to hear people confidently pronounce that some well known startup is sure to blow up.

Or you know the other one — the one where Snapchat lost $2 billion in just one quarter. Two-fucking-billion! What a disaster! Except that they didn’t actually lose $2 billion in cash. It was a stock option incentive related “expense” but I bet you didn’t know that because in an era where we only read the headlines — they must be a train wreck losing billions. (They actually lost about $175 million in cash in that quarter, FWIW. See appendix if you want to know more on this.)

“How could they succeed when they’re not even profitable!”

If you hire 6 senior sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business for 6 months. Your profitability will go down for 2 quarters while your growth may increase dramatically in quarters 3–12.
I know this seems obvious but I promise you that even smart people forget this when talking about profitability. 70–80% of the costs of most startups are employee costs so what you’re really talking about when a company is unprofitable is that they are growing their staff ahead of their revenue.


  • dublaj izle
    December 10, 2020 at 5:28 am

    If some one desires expert view about blogging after that i advise him/her to pay a quick visit this blog, Keep up the fastidious job. Jessi Adriano Persons

  • netflix
    January 31, 2021 at 8:27 am

    Hey there. I found your web site via Google whilst searching for a related subject, your web site got here up. It looks good. I have bookmarked it in my google bookmarks to visit then. Zita Sanderson Thurlow

  • online
    January 31, 2021 at 3:29 pm

    You made some decent points there. I did a search on the subject and found most people will approve with your blog. Addy Payton Russi

  • netflix
    January 31, 2021 at 7:12 pm

    Donec vitae sapien ut libero venenatis faucibus. Nullam quis ante. Etiam sit amet orci eget eros faucibus tincidunt. Donnamarie Giffie Gardener

  • 720p
    January 31, 2021 at 7:50 pm

    Pretty! This was an incredibly wonderful article. Thank you for providing this information. Timi Barny Tutankhamen

  • 720p
    February 1, 2021 at 7:51 am

    Thanks again for the blog. Really looking forward to read more. Want more. Caro Benjamin Starling

  • filmkovasi
    February 1, 2021 at 7:57 am

    I found your weblog site on google and check a couple of of your early posts. Continue to keep up the excellent operate. I simply further up your RSS feed to my MSN Information Reader. Seeking ahead to studying more from you afterward!? Stevena Dewain Octavla

  • tek parca
    February 2, 2021 at 5:30 am

    Great post. I was checking constantly this blog and I am impressed! Cass Thaddus Mignon

  • turkce
    February 13, 2021 at 8:00 pm

    Hey there. I found your web site via Google while looking for a similar topic, your website came up. It looks good. I have bookmarked it in my google bookmarks to come back then. Kristine Dall Tildie

  • turkce
    February 14, 2021 at 12:08 pm

    Here are some of the web pages we suggest for our visitors Mignon Enrico Strohbehn

  • turkce
    February 15, 2021 at 6:55 pm

    Thanks a lot for giving everyone a very breathtaking chance to read articles and blog posts from this blog. It is always very superb and packed with a lot of fun for me and my office fellow workers to search your website at a minimum three times in a week to learn the new tips you have got. Not to mention, I am also actually happy considering the effective tips and hints served by you. Selected 2 tips in this posting are easily the most impressive we have all had. Nessy Stearne Lidda

  • zovrelioptor
    July 4, 2021 at 3:10 pm

    F*ckin’ amazing issues here. I am very happy to see your post. Thank you a lot and i’m taking a look ahead to contact you. Will you please drop me a e-mail?

Add a comment