Re:What I learnt after burning $10M as an entrepreneur
by davedx on Wednesday March 31, 2021 @04:42AM
(#26644877)
By that logic, as long as you're growing you'll always be losing tons of money and never be profitable? How is that a good business model? I mean we're only talking about revenue vs sales and marketing spend here -- the business has a load of other costs too.
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Re:What I learnt after burning $10M as an entrepreneur
by throwawayfire on Wednesday March 31, 2021 @05:04AM
(#26645005)
That's a great business model if you have investors. You get a proven long-term return of 25% per annum.
If you're doing it out of your own bank account, you'll bankrupt before realising this return: it's not a lifestyle business.
Re:What I learnt after burning $10M as an entrepreneur
by ckdarby on Wednesday March 31, 2021 @09:49AM
(#26647255)
You hit a tipping point with enough market grab that customers start to approach you without advertising.
There is volume discount as you grow.
There is upsell potential on the customers you've signed.
As your signed customers grow their pockets grow to spend more on the solution.
Takes about 3-6. If I use Snowflake today at company X without issue and I switch jobs in a couple years to a new company that hasn't picked their platform, what do you think most people will pick?
Re:What I learnt after burning $10M as an entrepreneur
by snovv_crash on Wednesday March 31, 2021 @04:44AM
(#26644891)
You're effectively gambling on running out of new customers at some point. What a world!
Re:What I learnt after burning $10M as an entrepreneur
by alangibson on Wednesday March 31, 2021 @05:22AM
(#26645108)
> as long as you're growing you'll always be losing tons of money and never be profitable?
Basically yea. This effect is just assumed in the world of physical products. As long as you're growing you're nearly out of business because you need to use N revenues to buy your next N+1 of stock.