"So how did we end up in a place where people will tell you with a straight face not to worry about revenue, far better to grow (increase costs) and increase valuation."
Because once you start taking money, that is your valuation, more or less.
You've got 10,000 users using your service, growing at, say 30% annually. Once you start charging, say, $30/month, you've put hard numbers to things, and there's a financial framework to work within. Until then, you can keep projecting $x/year, because it could be anything.
Because once you start taking money, that is your valuation, more or less.
That's certainly the perception, but I'll argue that it's a short-sighted perception. There are lots of ways companies can push the gas pedal on growth, even once their financial model is known. Launch a new brand, do a line extension, do a brand extension, make an acquisition, goose the advertising budget, etc., etc.
To look at a company today, take their financial metrics, and assume they will always stay on the same trajectory, strikes me as silly.
I see how "playing the game" makes it seem that way, but projections are worth about the same in my hand as a fart.
If you have enough VC to keep going and you want to be the next twitter, I wont say you shouldn't, but it seems common sense that you would want to start making money so that you know, you start making money.
Yeah, and maybe I want to say something along the lines of "your valuation should be more closely tied to your actual ability to make money."
I will ponder it more, thanks for your comment.
Because once you start taking money, that is your valuation, more or less.
You've got 10,000 users using your service, growing at, say 30% annually. Once you start charging, say, $30/month, you've put hard numbers to things, and there's a financial framework to work within. Until then, you can keep projecting $x/year, because it could be anything.