Hacker News Reader

Comment by api | Hacker News Reader

I must point out that it is not uncommon for any tech company to lose money for a long time, especially if they are being bankrolled on the other side.

View on HN

It is uncommon to the successful ones. Microsoft, Google, Facebook, Apple - all profitable at IPO time. Look up old S-1s.

>It is uncommon to the successful ones.

Exactly. People love to point at Amazon as long unprofitable, but don't realize the company was generating massive cash flows for reinvestment, too.

There's no inherent reason startups or tech companies should lose money endlessly.

There is also a huge difference between not making a profit and burning money. Amazon made it past the point of having a runway very quickly.

Softbank is responsible for spreading that assumption, no? Fairly recently? (Uber, et al.)

I mean, there are two things here a) even Softbank doesn't assume indefinite losses/ unknown profitability, they have an exit horizon in mind that just happens to be larger than that of most other funds, and b) a lot of tech startups that have IPO'ed in the recent past have all been unprofitable when going public, and Softbank isn't responsible for most of them. A notable exception was Zoom ( I'm talking about last year ) who were profitable before the IPO, as far as I remember.

Companies are allowed to take on WAY more operating debt than in previous decades (especially in tech VC!) - whether this is rational or otherwise (I personally think this trend is fucking insane), these comparisons are not apt.

Reply on news.ycombinator.com