Re:You Don’t Need a Master Plan, You Just Need to Start
by nostrademons on Monday November 14, 2016 @06:54AM
(#12949204)
It ain't working out so well for most of those unicorns...
There's a complication in that if you're spinning off massive profits per customer but re-investing them in expansion, you won't show any GAAP profits, but your revenue will increase exponentially and as soon as you stop expanding you'll be massively profitable.
Amazon & Uber are in a very different league from say Fab or Homejoy. If your core business segments are profitable but you're investing that money into moving into other segments, then you're in good shape. If you're losing money on every new customer and making it up in volume, you have a problem.
There's a complication in that if you're spinning off massive profits per customer but re-investing them in expansion, you won't show any GAAP profits, but your revenue will increase exponentially and as soon as you stop expanding you'll be massively profitable.
Amazon & Uber are in a very different league from say Fab or Homejoy. If your core business segments are profitable but you're investing that money into moving into other segments, then you're in good shape. If you're losing money on every new customer and making it up in volume, you have a problem.