Jason Bosco's post celebrates the milestone of his company, SendGrid, achieving profitability instead of relying on venture capital funding. He emphasizes the deliberate choice to prioritize building a sustainable and profitable business from the ground up, highlighting the benefits of controlling their own destiny and focusing on customer needs. This approach, while potentially slower in terms of rapid scaling, allowed them to build a stronger foundation and ultimately led to a more rewarding outcome in the long run. The post implicitly contrasts the often pressured, growth-at-all-costs mentality of VC-backed startups with SendGrid's more measured, organic path to success.
Jason Bosco's Twitter post, entitled "Are you VC-funded? No, we're profitable," delves into the contrasting philosophies and operational realities between venture capital-backed enterprises and those that prioritize profitability. He posits that while the inquiry "Are you VC-funded?" is frequently perceived as a compliment, implying scale and potential, it often masks a fundamental difference in operational strategy. Mr. Bosco argues that a response of "No, we're profitable" is not merely an alternative answer, but rather a declaration of a distinct, and arguably more sustainable, business model. He elaborates on this by suggesting that venture-funded companies are often driven by growth at all costs, sometimes prioritizing market share acquisition and rapid expansion over the generation of consistent profits. This approach, while potentially leading to significant valuations and eventual market dominance, often necessitates substantial external funding and carries inherent risks. Conversely, profitable businesses, as highlighted by Mr. Bosco, operate under a different set of principles, focusing on fiscal responsibility, controlled growth, and the generation of positive cash flow. This allows them to remain independent and less susceptible to the pressures of external investors, while simultaneously demonstrating a robust and inherently sustainable business model. He concludes by implying that profitability, though perhaps less glamorous than the rapid ascent often associated with venture capital, represents a more stable and ultimately more desirable path for certain businesses. This underlying stability, he suggests, allows for greater control, long-term viability, and a more measured approach to growth.
Summary of Comments ( 10 )
https://news.ycombinator.com/item?id=43406293
HN commenters largely discussed the merits and drawbacks of bootstrapping vs. VC funding. Several pointed out the inherent bias in Jason Bosco's original tweet, noting that he's incentivized to promote bootstrapping as a founder of a bootstrapped company. Others argued that profitability allows for more control and long-term vision, while VC funding enables faster growth, albeit with potential pressure to prioritize investor returns over other goals. Some users shared personal experiences with both models, highlighting the trade-offs involved. A few questioned the longevity of Bosco's "forever company" aspiration in a constantly evolving market. The idea of "ramen profitable," where founders earn just enough to survive, was also discussed as a viable alternative to both VC funding and robust profitability.
The Hacker News post "Are you VC-funded? No, we're profitable" (linking to a tweet about a company proudly proclaiming its profitability) sparked a discussion with several compelling comments. Many commenters expressed appreciation for the company's focus on profitability over growth-at-all-costs, viewing it as a refreshing counterpoint to the prevailing startup narrative. Some highlighted the long-term sustainability and resilience that profitability offers, particularly in uncertain economic times.
Several commenters delved into the nuances of "profitable," questioning whether it referred to gross profit, operating profit, or net profit, and emphasizing the importance of clarifying the specific type of profitability being claimed. Others discussed the potential trade-offs between prioritizing profitability and pursuing rapid growth, acknowledging that while profitability can be a strength, it might also limit a company's ability to aggressively capture market share.
A few commenters shared anecdotal experiences, either from their own businesses or from observing other companies, about the benefits and challenges of bootstrapping versus seeking VC funding. These anecdotes provided real-world context to the broader discussion about different funding models and their implications for company strategy and culture.
Some commenters also touched upon the signaling effect of proclaiming profitability, suggesting that it could be a way to attract a different type of investor or customer, one who values stability and sustainable growth over rapid scaling. There was also discussion about the potential for a shift in investor sentiment, with more investors potentially favoring profitable businesses over those focused solely on growth. Finally, a few commenters offered practical advice for companies aiming for profitability, such as focusing on customer acquisition cost and lifetime value.