Growth vs. Size | Hacker News Reader

Growth vs. Size

5 pointsmarrone5 comments

What are your views on what the aim of a company should be;

a) a target size or

b) continuous growth of some rate.

Also, should it be relative to what else is out there?

For example, should Microsoft continue its pursuit of Yahoo! (at the costs of its stock value)? Once upon a time MS was probably happy with their size, but since Google is a bigger kid on the block now, they feel they need to grow more simply to be #1 again.

Someone else recently asked why YC startups don't strive for even grander visions of Facebook proportions (the fact that is easier said than done is a different issue).

So my question is, should you as a company decide a target size/market-share to reach at which point you will be happy, or is it a continuous growth that matters more regardless of your current size (or lack thereof). And does the existence of a bigger competitor mean you must do whatever it takes to outmatch them?

Somewhat related, is the question poised by Michael Arrington as to whether YC News wanted to grow or stay under the radar.

What I've learned is that revenue and growth are in some ways meaningless. For example you can have a billion in revenue, but if your costs are greater, you are moving backwards. Incredible growth is not helpful if you don't make money from it.

It is net profit that counts for a business.

For a public company the goal (by law) is to maximize profit per share. I think Microsoft should split itself up. Most of its businesses outside of Windows and Office lose money, and there is little overlap between an operating system and an internet advertising network.

For a YC company the goal is whatever the founders want. Personally, I'd want to maximize growth, but in a capital efficient way. Slower growth from bootstrapping can often make founders more money than fast growth from VC dollars.

Whats amazing is that before the internet you would have never even considered questions like this so early and immediately in the life cycle of a business.

I'm pretty sure that VCs (which predate the internet) considered these issues.

I'd be surprised if outside investors (which predate VCs) didn't consider them.

I wonder if the target should be 100 million $ in revenue, or 1 billion $?

Sorry - puzzled about the questions people ask themselves at times...

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