That said, being overcapitalized is perniciously corrupting. I saw first hand what happens when there's too much money floating inside a company. Malinvestment is an issue at the company level just as much as at the macroeconomic level.
Management starts acting like trust fund kids, forgetting that, one day, the money might run out, and making a profit is the only sustainable way to run a company.
As much as there are examples from history of companies that have blown venture capital on stupid things, I think Redis Labs has a good shot at reaching the holy grail of an IPO.
Pricy, and worth every penny.
Made my life so much easier
Click a few buttons it gives me an URL to point my apps at.
Now and then I’d get an email, hey instance X needs more memory, click here to see what’s going on, or just drag the slider to a higher plan.
Worked great, Hardest part was giving good names so I could remember what each instance was for.
My guess is that fast growth + $35-40MM in current ARR should have sufficed.
Just my 0.02.
For a founder, that way is runway. The founder who is terrified about the company's future, will raise a lot of money to not think about that future. Money buys them time and time buys them distance. A clean, safe separation from reality where unpleasant voices like "do we have product market fit?" or "is our moat large enough?" can be ignored or saved for "later". A "later" that seems further and further away depending on the money raised.
Overcapitalization, in that sense, is meant as a security blanket, not a safety net. In that sense, the complacency and eventual corruption of the organization derives from the need for safety that executives and their managers subconsciously & naturally prioritize above all else.
On that note, I'm curious how Slack will fare over the next few years.
It’s not a bet that the product will be profitable and successful—that should be a given. It’s a bet on the company becoming the leader in a huge market.
That said, your larger point still holds :) And of course raising the stakes this way can also increase the risk of ruin.