Re:Ask HN: Inherited the worst code and tech team I have eve...
by sofrimiento on Tuesday September 20, 2022 @03:33AM
(#32908783)
I’ve worked at a $100 million revenue online company that didn’t make any profit. OP says money is tight after covid, so seems like it the business is connected to a (physical) market that was affected by the pandemic. He says there is an extensive roadmap by a management team that are not familiar with the technical details, so it seems like the technology is not the core business.
It’s not difficult getting to a high revenue fueled by aggressive and expensive acquisition using money from investors who gets dazzled by growth numbers, but if your customer lifetime value is low and you’re not a pure SAAS business which means margins won’t automatically improve with scale, turning that company profitable can prove very difficult.
From what is told in the summary, it seems like the software stack and these 3 people constitute the core of the business that is going on. The business may be something totally different. But it seems to be running on that software.
> And... $20m is revenue
Even if they have lower margins than what you yourself imagined, $20 m revenue/year is still a gigantic amount. You can improve upon whetever margin or inefficiency in the process and increase the net profit - optimize vendors, costs, sales pipeline.
The difficulty in modern Internet business is getting to some place at which you can command $20 m revenue from any market. Finding the customers and the users. Not the margins.