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0 pointserikpukinskis10y ago0 comments

> there is pressure to grow fast, but it comes from the investors and not from the market per-se

I don't even think the pressure comes from the investors per-se, it comes from the capital investments you make which necessitated the funding. Excess staff, buildings, tools, etc, all have ongoing costs and also depreciate in value. You are by definition building out excess capacity based on a growths model. If sales don't keep up, you become insolvent.

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audleman10y ago

I agree that the internal costs are a factor, but I also agree with the original point. I'll share an anecdote of the CEO of my company.

We're a 2-year-old startup that hasn't reached profitability yet. We asked when that might happen, and he said we actually don't want to do that. We asked why, and he said that as soon as we start making a profit our investors will immediately start focusing on it. They will ask why we're not leveraging our profit to the maximum, what can we do to grow revenue? Whereas as long as we're losing money we can continue to experiment.

leesalminen10y ago

Oh man, I am glad I don't have any VC-style investors. I've a 2 year old startup and can actually talk to my investors about why we want to experiment.

mindcrime10y ago

Fair enough, there's an element of both I think. But there definitely is pressure from the investors, due to the time boxed nature of VC funds.

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