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Comment by keeda | Hacker News Reader

I'm not sure about "profitable" because these are very young (2 - 3 years old) private companies, but there have been a few reports showing their growth indicating very strong PMF i.e. utility:

https://a16z.com/revenue-benchmarks-ai-apps/

https://www.cnbc.com/2025/03/15/y-combinator-startups-are-fa...

https://medium.com/@gjarrosson/ycs-revenue-explosion-497ea17...

https://stripe.com/blog/inside-the-growth-of-the-top-ai-comp...

https://www.ft.com/content/a9a192e3-bfbc-461e-a4f3-112e63d0b...

https://menlovc.com/perspective/2025-the-state-of-generative...

The revenue growth -- assuming these investors are not all colluding to fudge these numbers on a grand scale -- is way higher than what most have seen before.

Not everyone is hitting PMF of course, but apparently the success rate is also way higher than the past. Ignore the valuations and funding numbers, they are definitely inflated due to the hype.

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> "I'm not sure about "profitable" because these are very young (2 - 3 years old) private companies"

In any other industry, this is the death knell for your company. It's only in tech where the investors drop so much money on early investments, that companies can get away with losing money for "2-3 years".

>The revenue growth -- assuming these investors are not all colluding to fudge these numbers on a grand scale -- is way higher than what most have seen before.

As a matter of strict numbers? The revenue growth could be higher just because of inflation.

You really seem to be doing a Gish Gallup here of links, which don't really prove any of your points. If there are specific metrics you can point to in these links that prove your point, then please call that out, but every one of these that I have clicked on has felt like a nothing burger.

> Menlovc link: is just talking about investment in AI, which proves my point

> FT: Paywall

> Stripe: You've got correlation, but not causation. An alternative thing you're proving could be that more investment in the space makes it easier to bring a product to market and earn revenue (How does this compare to SaaS Startups 5-10 years ago)

> Medium Link: is more of "proving my original point"

> CNBC: It's not clear what the metric is here that's making your case

> a16z: It looks to me like, this is actually proving the point that every one of these is considering "investments" as "revenue" which is wild.

> In any other industry...

Why bring up any other industry when we all know this is the VC playbook for tech companies, and has been working for them for decades? Reminder that Amazon, Uber, DoorDash etc were burning VC cash for upto a ~decade before becoming the giants they are now.

> As a matter of strict numbers? The revenue growth could be higher just because of inflation.

I have no idea how inflation, at < 3%, would matter in charts that show startups going from 0 to million+ in revenue in months to < a year.

> You really seem to be doing a Gish Gallup here of links, which don't really prove any of your points.

Yes, they do actually. I'm not sure why you think those links are talking about investments when they very clearly are about revenue. Open any of them up and cmd-F "revenue". Here's basically the gist of these links:

Investors: "Our startups are growing revenue at record pace" (10% growth week over week (!!) for YC startups as per the CNBC link)

MenloVC: "Enterprise decision makers tell us they're spending on AI at record pace" (E.g. "companies spent $37 billion on generative AI in 2025,3 up from $11.5 billion in 2024, a 3.2x year-over-year increase.")

Stripe: "Our AI startup customers are hitting revenue milestones at record pace."

It's not a "Gish Gallup" if it provides multiple, valid, different data-backed perspectives from different players in the ecosystem that all support the underlying thesis, which is that these AI startups are growing revenue at a unprecedented rates.

> why bring up any other industry when this is the vc playbook

Because my point is how messed up the VC incentive structure for tech is. This is proved by comparing it to every other industry.

> Yes, they do actually. I'm not sure why you think those links are talking about investments when they very clearly are about revenue.

They are using the word "revenue", but can you be certain that the word means "revenue from product sales"? Or does it just mean "revenue from investment".

A couple of the articles specifically mentioned the series A rounds as part of "revenue generation". And my whole point was that investors celebrating how much faster they're investing in AI startups is a classic "begging the question" type fallacy. They are measuring themselves on how much money they are investing in startups, and then saying that is proof that the startups are valuable.

True, the tech VC incentive structure is weird from a typical perspective -- it is very hit-driven... throw money at a thousand startups burning cash to capture a market, and hope one of them becomes a unicorn. However, it has been working very well for them, so at this point nobody questions it.

> They are using the word "revenue", but can you be certain that the word means "revenue from product sales"? Or does it just mean "revenue from investment".

Investment and revenue are accounted for very differently, and if there's any mingling between them that would be highly problematic, probably fraudulent. For instance, there are tax implications, investments are not taxed but income from revenue can be. There can be all kinds of shenanigans that happen with finances in startups for sure, but those are typically unethical and illegal.

In this case they all are talking about revenue. Some articles do mention that funding rounds are also being affected because these companies have been hitting revenue milestones so much faster yet with much fewer people, but that is a separate aspect from the revenue.

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