The bubble has popped forunprofitable software companiesDavid Heinemeier Hansson
Creator of Ruby on Rails, co-owner & CTO of 37signals (Basecamp & HEY), best-selling author (REWORK, It Doesn't Have to Be Crazy at Work, REMOTE), Le Mans class-winning racing driver, antitrust advocate, investor in Danish startups, frequent podcast guest, and family man.
We've often been accused of being unambitious with Basecamp. Why didn't you just raise a bunch of venture capital and go for The Big Time? Why were you taking profits when you could have invested in growth? Don't you want to own a unicorn? Don't you want to be a billionaire?!
This is the Silicon Valley way. Ride the big money to the moon or die trying. Anyone interested in living on earth just don't have the vision or the courage to reach for infinity and beyond. Operating within your means, taking profits along the way, and aiming for a stable, long-term business is not just dismissed, but frowned upon.
The logic of venture capital is to rush every business it touches through a steroid program that accepts a mortality rate of up to 90%. All it needs is one moon shot out of ten to hit escape velocity, and the fund will be golden.
But golden for whom? For how long? The venture capitalists who invested in Asana, Monday.com, and Smartsheet surely all made out like bandits when these unprofitable software companies went public. Now every single one of these stocks is getting destroyed in the public market, as investors sour on the idea of them losing hundreds of millions of dollars every year chasing growth with no prospect of profits in sight.
https://world.hey.com/dhh/the-bubble-has-popped-for-unprofitable-software-companies-2a0a5f57noogai03 1781 points 12 hours ago
To some extent I'm glad of this. The worst trend in modern tech is the following:
Found a company on obscene amounts of VC funding
Undercut the prices of all your high street competitors and run at a massive net loss for a decade
Be so cheap that the competition goes bust
Then hike your prices to the moon once everyone else is gone.
I hope this dies
https://old.reddit.com/r/programming/comments/yxn7fa/the_bubble_has_popped_for_unprofitable_software531 comments