I've always felt this, I've never seen a business actually _do_ this. Why don't businesses just stop employing so many people? Stop expanding? Stop trying to acquire more users?
I mean, I know from my economics studies that businesses kind of have to keep competing or they die. It's just really sad.
As a mid-30s engineer, one evening I went to my VP of Engineering and suggested that we could be a lot more profitable if we cut back to half our staffing levels and concentrated on excelling at just our core product. She smiled politely and told me we had much brighter future than that.
As a late 40s VP at that same company, we’re about 25x the revenue and a greater ratio than that of free cash flow, employ far more people, and serve far more customers. That’s not in any way sad.
Is there any reason why this growth potential still exists for smaller companies? We're in a thread about how large companies are able to undercut smaller competitors.
They got where they are by raising from investors on the premise they would 10x the money, and also hired top talent with stock options that are only worth anything if the company similarly increases in value. If ambition wasn’t in their DNA, they never would have gotten to the good state you liked in the first place.
The payoff if the growth attempts work is asymmetric, so it’s worth the risk.
I've been wishing someone would make 'VC for non-profits'. It would essentially be a charity. Not a 'give money away' charity, just a 'below market rate returns' charity.
The point being to help finance someone making a self sustaining product.
So customers get a product, workers get a salary, 'investors' (doners really) break even.
> I've always felt this, I've never seen a business actually _do_ this.
I do this. My business has linear growth (which means if you look at year-to-year percentage increases, they decrease over time). I'm very happy with it — I have no pressure from VCs to achieve crazy user growth at all cost, no pressure to show exponential growth. The business works well, the customers are happy, things are good!
There are many businesses like this, they just tend not to be the fashionable ones. You won't read a techcrunch article about one of them. Press will call them disparagingly "lifestyle businesses".
And yet — these are the businesses that make most sense for the users! In a company like that, business goals are 100% aligned with user goals. The business makes money if the users continue paying the subscription fees, which they will do if they are happy and get value from the software.
b/c they hired expensive executives who get bonuses and their greed drives the whole thing. Plus the investors expect it plus you could probably say something about fiduciary responsibility.
I mean, I know from my economics studies that businesses kind of have to keep competing or they die. It's just really sad.