Profit or growth?

My startup has about 30k MRR but 50k in expenses.

I can get to break even in less than a year if I slow down hiring and other growth. I think the market size is maybe 100m but there are a lot of (little) competitors popping up. Others have estimated a 1b market size but I’m skeptical.

So, small and profitable, or big and unprofitable?

  • It depends on your runway, your risk profile, your exit plan, and of course what sort of business you enjoy running most. So there’s too little information to go on.

  • Depends on if you want to get more investment or run a real company. In the tech bubble investors focus alot on growth. In the real world profit is all that matters and long term it will be true for you as well.

    How long can you sustain that much loss?

    • I can sustain it for 6 months. But our revenues are increasing, just not at venture rates (maybe 10 or 15% a month)

  • Focus on profit. At the rate you’re burning, you will hit scale in a year, but at what cost? As you scale, your costs go up, you need to bring your costs down and profits up as you scale. Otherwise, you’re going to scale into a big bust.

    Your cost per unit needs to come down! If by the end of the year, it will plateau as in your operating costs will become fixed to a degree then scale, but otherwise, you’re just burning a ton of money without purpose.

    Times are about to get really tough, you’ll need the bread now. Trust.

    • OP Here – Agree about solving unit cost issues first. The way things are structured, unit costs will drive down pretty significantly, but it’s probably better to take a few months, get there first, and then scale.

      Do you think times are going to get tough all around, or just based on this thread? Care to share more insight?

  • Is the MRR including paying yourself and your employees (if any) a living wage?

    If not, then it isn’t truly breakeven – and you have to grow just to be able to survive.

    If you’re located anywhere in the US and have almost any number of employees, the stated MRR doesn’t look large enough to constitute true profitability.

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