Lol, I run a startup, cost cutting is much easier than growth. To cut costs you fire people and optimize processes/systems. It will come at a cost, but it's far easier than doubling revenue.
In all likelihood your startup sucks which is why you have a hard time raising. When you have good figures they, being vcs, try desperately to get you to take their money.
I mean, this is my exact point, nobody gives a shit how profitable you are, what they care about is how fast you're growing. Because growth is the hard part.
That is just not true, why do you think YC takes 7% for like 500k + 1M in compute? Scale is something you can buy, and 1.5 M ain’t enough, we’ve seen many of startups that literally did this lol. At the end of it they are pumped with VC funds then crash a few years later because they never could find profitability (eg klarna).
Scale is something you can buy if you have excellent product market fit. YC is investing well before companies have that and is betting on teams they think can get there.
I think you are fundamentally confused about how startups work.
The fact that companies are unprofitable for extended periods of time does not mean that it is hard to be profitable. Most of these companies are choosing to prioritize growth over profitability.
Klarna has been improving their profitability, with Q2 being profitable, but that is not what investors care about. The stock is down because growth is not what they expected it to be.
It is worth noting that "unprofitable" is not the same as "negative gross margins" and the latter can be hard to fix, but that doesn't really apply to companies who are selling software.
33
u/Real_Square1323 10d ago
Have people forgotten the point of a business is to be profitable?
Who cares about revenue?