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Comment by rqtwteye | Hacker News Reader

Something is really wrong in this market when even a "successful" company like Squarespace deson't manage to be a profitable business.

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It sounds like investors invested billions of dollars making a product that makes million dollars per quarter?

So from that perspective, was this ever a successful company or just a grand party thrown by the investors? Isn't this just "how it works" ?

The vast majority of investors in the railroads lost their money; lots of people lost money running fiber around the world, iridium went bankrupt and lots of people use those phones, etc.

Not all investors are looking for the business to be profitable. NVidia investing in AI companies drives up demand for AI chips. NVidia is simply seeking to create a prisoner's dilemma around AI compute spending. If Nvidia is successful, then most of the money they invest will flow back into their coffers as margin + the forced spending by other parties to keep up.

Headcount and marketing spend required to be perceived as "successful" in the industry is commensurately high.

Because companies chose to not be profitable and invest all their money into growth.

Are they actually successful or just succeeded in marketing their brand recognition. Probably with absolutely massive spend... Just how many people are in their market with whatever monthly spend they have.

If you look at the past 10 years (or more) this has been the case with nearly every single poster child of successful US tech company.

Look at YCombinator's top/most darling startups. Hardly any of them are profitable or sustainably profitable

Seems like the model has been to sell it to the next sucker all along: an acquisition by a bigger company, the stock market, or just another PE company.

Never to actually create a proper business...

My old fashioned view is, and notwithstanding periods of debt for grow investment, if you don't make a profit, you don't have a business.

If you have enough money, you can kill a lot of viable businesses though.

If growth is the goal, you sacrifice margin for revenue

And sometimes you sacrifice solvency as well?

Gambling on exponential growth and then having the growth fall short (say, because people moved their personal web sites to facebook instead of squarespace) is a risk in any time you go big or go home. Sometimes (often!) you ... go home.

I would say most of the time you sacrifice solvency

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