Should startups care about profitability? More news at 10

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.


  • bahis
    December 19, 2020 at 4:55 pm

    I needed to thank you for this great read!! I certainly enjoyed every little bit of it. Darell Raymund Pytlik

  • altyazili
    December 19, 2020 at 8:00 pm

    This is beyond brilliant. It stops time. She must be so proud. Rodie Eugenius Ewald

  • yetiskin
    December 19, 2020 at 9:48 pm

    I visited the 6930 w.alternate Panama City Beach FL. Very clean store and Chassidy was so very nice and friendly. Good job. Great food. Marne Zolly Idolah

  • sikis izle
    December 20, 2020 at 12:31 am

    These tips can help you become the great soccer player that you truly want to be. Larine Merell Teak

  • bluray
    December 20, 2020 at 4:37 am

    There is significantly a package to know about this. I presume you made sure nice factors in features likewise. Joellen Gonzales Cordula

  • ucretsiz
    December 23, 2020 at 7:54 am

    A big thank you for your blog article. Really looking forward to read more. Really Cool. Jackie Ripley Kissner

  • indir
    December 23, 2020 at 9:39 am

    Thank you for the auspicious writeup. It actually was once a amusement account it. Cherrita Haroun Morganne

  • bedava
    December 23, 2020 at 11:13 am

    Excellent post! We will be linking to this great content on our site. Keep up the good writing. Adrienne Onfroi Sidon

  • yify
    December 24, 2020 at 3:18 am

    Everything is very open with a really clear clarification of the challenges. Kalli Ashby Godewyn

  • yify
    January 11, 2021 at 9:24 pm

    This piece of writing will help the internet visitors for building up new website or even a weblog from start to end. Tess Farley Yaeger

  • erotik
    January 23, 2021 at 12:07 pm

    There is certainly a great deal to know about this issue. I like all of the points you have made. Elie Abbot Kirtley

  • yerli film izle
    January 29, 2021 at 2:28 pm

    I admire your piece of work, thankyou for all the great articles . Rafaelita Ettore Ailsa

  • online
    January 29, 2021 at 11:58 pm

    Absolute alluring advice you have remarked, thank you for publishing. Vivie Romeo Olcott

  • torrent
    February 7, 2021 at 8:38 am

    I value the blog post. Really thank you! Want more. Corri Doyle Felisha

  • anime
    February 7, 2021 at 10:28 am

    Wow, great blog article. Really thank you! Want more. Ailey Alexander Sarkaria

  • watch
    February 7, 2021 at 1:10 pm

    It was very useful, I can say it was a useful article for me. Amy Brien Petunia

  • yabanci
    February 10, 2021 at 4:33 am

    This info is invaluable. When can I find out more? Sadye Dom Paris

  • 720p
    February 10, 2021 at 5:03 am

    I enjoy reading a post that can make people think. Also, many thanks for allowing me to comment! Donielle Husain Rior

  • bluray
    February 10, 2021 at 6:07 am

    Excellent blog post. I certainly appreciate this website. Stick with it! Belicia Myles Addam

  • bedava
    February 10, 2021 at 7:16 am

    earliest sooner that an ad libitum grub low-lying in protein and penetrating in carbohydrate has been stereotyped to from the in any holder beyond touch doubt upon as calorie proviso, says Simpson. He says that varied respected protein, lowly carb diets may setting at unfettered people be poverty-stricken of gradient or maximise fertility, but they could spokeswoman problems in the international term. Anastasie Ulric Leifeste

  • altyazili
    February 10, 2021 at 10:54 am

    Hi there. I discovered your blog by way of Google whilst searching for a comparable subject, your website came up. It appears to be great. I have bookmarked it in my google bookmarks to come back then. Teresa Pearce Rorie

  • indirmeden
    February 10, 2021 at 8:15 pm

    Some genuinely choice posts on this site, saved to fav. Halli Rafferty Lorn

  • turkce
    February 11, 2021 at 2:30 pm

    I carry on listening to the news broadcast speak about receiving free online grant applications so I have been looking around for the best site to get one. Could you tell me please, where could i acquire some? Petronille Bryant Cressida

Add a comment