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Joined 1 year ago
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Cake day: June 9th, 2023

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  • *billion

    And profitability is not the same as generating revenue.

    You can earn $200M a quarter and still have expenses of $220M, meaning you’re making a net loss.

    That’s why companies focus on exponential growth first and don’t really care about portability, but once the userbase is large enough, they will try to monetize it. Either through ads, or paid subscriptions, premium plans, special avatars, etc.

    That will surely piss of some of the early adopters, but usually isn’t significant enough to make an actual dent.

    The last step (which we have also seen) is then kicking out staff. That has two effects:

    1., It brings down the overhead (= salaries and attached taxes & social security) 2. The revenue per capita is inflated, i.e. it looks as if every employee is generating 4000 bucks instead of 2500 (random example), which is something that looks good in an IPO prospectus.