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Reflecting on My Failure to Build a Billion-Dollar Company

(medium.com)
2101 points jamesjyu | 2 comments | 07 Feb 19 15:28 UTC | HN request time: 0.556s | source
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holman ◴[07 Feb 19 16:22 UTC] No.19106188[source]▶
Really love this post. My favorite line is:

> Every month of less than 20% growth should have been a red flag.

I think that's pretty insightful. 20% growth is great for a normal business, of course; for a VC-backed startup it can show some warning signs about future hard decisions you might have to face.

I think there's certainly lots of discussion that has been had — and should be had — about "should I or shouldn't I raise money?", but there still are plenty of companies and founders who will raise VC, and paying attention to those early warning signs are important if that's the choice you make. It's important to worry about it each month and each week rather than the two months surrounding the raise of your next round.

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1. noxToken ◴[07 Feb 19 17:26 UTC] No.19106680[source]▶
> The idea behind Gumroad was simple: Creators and others should be able to sell their products directly to their audiences with quick, simple links. No need for a storefront.

Then:

> For the type of business we were trying to build, every month of less than 20% growth should have been a red flag.

According to what metric? This isn't meant to be snarky, but that type of growth rounds out to about 900% over the course of a year. Even if it meant that they'd grow 20% in the first month and had profits plateau immediately (i.e. 20% -> 16% -> 14% -> 12.5%), that's still 240% growth over the first year. What kind of business expects 900% to be the minimum growth over the first year?

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2. AndrewKemendo ◴[07 Feb 19 17:46 UTC] No.19106842[source]▶
According to the metric of Social Media.

The Metric you have to meet now is Facebook's growth rate in the first few years of launching with high gross. 500% first year, 250% next year etc...