Re:Atlassian is 20 years old and unprofitable
by Ferrotin on Thursday June 30, 2022 @07:17PM
(#31939962)
> Growing revenue while still not making a profit is not impressive.
It is when you’re a software company and the marginal cost of the goods is zero.
Re:Atlassian is 20 years old and unprofitable
by vladich on Friday July 01, 2022 @02:31PM
(#31950732)
Atlassian makes zero profits because it reinvests them in growth (hiring, acquisitions). The common sense here is that you return profits to shareholders only if you can't grow fast enough. That's the case for a lot of other industries where you have single digit growth in good years. But if you can grow 30% annually, you bring much more value if you reinvest your profits.
Re:Atlassian is 20 years old and unprofitable
by retcon on Friday July 01, 2022 @06:11AM
(#31944425)
>It is when you’re a software company and the marginal cost of the goods is zero.
$600mm annual sales and marketing isn't cost of goods but the method of accounting that I subscribe to includes such costs as a fundamental cost of production delivery.
Re:Atlassian is 20 years old and unprofitable
by mbesto on Friday July 01, 2022 @10:16AM
(#31946707)
It's not, you can "turn off" S&M and people will continue to pay you.
Subscription revenue isn't the same as revenue in other businesses.
Re:Atlassian is 20 years old and unprofitable
by mbesto on Friday July 01, 2022 @10:14AM
(#31946680)
> If you give me $100 today I can go out a buy $100 a pair of new shoes, and sell it for $70. Give me $200 and I'll go out and by two pairs of shoes and sell them for both $84 (total)!
Hilarious that you use the analogy of shoes. This is exactly the problem. Great explanation on this concept:
https://a16z.com/2015/05/15/a16z-podcast-why-saas-revenue-is...
> Grow profits every year by 30% and I'll be impressed.
Oh, you mean like Facebook did?
https://www.statista.com/statistics/277229/facebooks-annual-...
Growing revenue while still not making a profit is not impressive. If you give me $100 today I can go out a buy $100 a pair of new shoes, and sell it for $70. Give me $200 and I'll go out and by two pairs of shoes and sell them for both $84 (total)! Keep giving me money and you'll continue to see this growth I promise!
> This is unheard of in any other industry/market
Given my example above, that should be a warning, not a sign of success.
I find it mind-boggling that people can really not even grasp that growing revenue with out demonstrating you can transform that revenue into profit doesn't mean all the much.
Grow profits every year by 30% and I'll be impressed.