During the dot-com bubble, making money was optional. Given enough eyeballs, all investors are shallow, went the refrain, and money poured into silly startups that had little chance of ever making money except in equally silly IPOs and acquisitions. Today, by contrast, revenue seems to be sexy again. Not everywhere, mind you. A …
Scene: Int. Boardroom
<SFX: cups and teaspoons>
Board Member 1: I...I've just had an epiphany!
Board Member 2: Really? What is it?
BM1: I think we should... (dramatic pause) ...make some *money*.
*Rest of Board gasps*
BM2: This is preposterous! An outrage!
*Rest of Board murmurs agreement*
BM1: No, really! Instead of spending millions in venture capital on servers to support a freeloading piss-poor bandwagon with a limited lifespan, we should look to provide a product/service that a smaller number of people will actually be happy to pay for!
Board Member 3: Eeek! (Faints)
BM2: You just don't get the Web 2.0 concept, do you. Go on - get out of here.
Try trying a bit less hard for the right word; it's "exit" (or in English, "exits").
indeed. "exeunt all" vs. "exit BM1", but my money's on it being a parody of shakespearean stage direction. you know, using all fancy words to make the thing look amateurish, but with a knowing wink to the original.
It's true. Jokes do fail when you have to explain them (though it could be just me)
And now for the canonical question:
What is the canonical revenue situation?
Are there any dotcoms from 2001 which started off without a real business model
except eyeballs. And went on to survive and make money ? It shouldn't matter if they were bought by a bigger fish - as long as they started making money at one point.
Only ones I can think of are:
imdb.com [now amazon]
cricinfo.com [now ESPN]
(not sure if they are profitable now, but they are still around and supposedly going strong).Google probably doesn't qualify as they supposedly always had the plans of the adword model.
Profits? Who needs them?
Imagine that. An investor should consider if the company's business plan is likely to be profitable. The idea of profit must be a radical, new concept as the stock market wouldn't have ignored it in the dot com bubble. That would mean stock market investors are utter morons, and a menace to economic stability, but that can't be right.
Wow, business needs to earn a living, to be as business...
... news at 11.
@"This may be why roughly one per cent of Skype's 560 million registered users ever pay the company anything."
So 5.6 million paying customers. That is still, for any company, a lot of paying customers. I bet most of us would be happy owning a website with 1% of their 1% of paying customers! :)
Joking aside, the core principle of any business is to spend less money than they earn. So its not rocket science, so they can see what they need to do, yet I've lost count of the numbers of companies that have wasted vast amounts of money. So I can't help thinking at times the real money is being the top executives milking the investment money out until the company collapses, then they blame market conditions etc.., then go into another company to do the same.
But then the start up companies are not the only ones that suffer from these effectively parasite like executives that are basically leaching out the money from the company. For example older strong companies end up being broken up, as the executives sell off its parts, then they go for selling off the remaining core of the business to some other business, then the parasite executives still walk away with vast sums of money (For example Cadbury sadly suffered this fate).
All to often the executives hot air ideas and speeches end up being just cover stories for their real scam plans of milking the money out until the company dies. :(
Its not about earnins.
You can start a business, earn enough money to pay for your expenses and more salary and benefits than any job you had, or maybe a little less money and more hours but you are your own boss and you are doing what you love. I would consider that successful.
Now someone comes along and buys your company for a bit more than than its revenue can justify, then manages to generate a lot of buzz and excitement and now the company has more money invested in it than it can ever hope to return. Its still making the same as before but its now a miserable failure.
Or you can have a business that is making more money each and every quarter, but the "market" expected it to be making 20% more than it did. That expectation was reflected in the stock price, so when its not met the stock value goes down and investors lose money and everyone talks about how horrible the company is doing.
the subject of this article doesn't fit well with how the article was written however any 'revenue' that's being cited is simply funny money.
Being in the tech industry I see first hand what's going on and all we are see'ing is companies selling out to larger companies or holding companies(investment firms).
It's a lose lose situation since the majority (if not all) of our big corporate giants have been losing money hand over fist because of poor management and simply buy up any competition to try to stick a rag in the drain hole.
With the investment firms buying up companies alot of the time (at least in the US) that's your own tax money being used.
If you look at the amount of money the small business administration is throwing around and also all the tax money and loans the banks got which funnels into corporate america it's no wonder the market is moving. However it's moving in circles as our currency is worthless and the larger a corporation gets the more prone to failure it's simply going to be.
So moral of the story is:
If you think an investment firm can buy up a tech startup and do better things with it than the people that developed the startup you must be a wall street banker.
And if you think taking money from one group of people to give it to a corporation is how business works welcome to the third world.
I personally did some SBA loan lookups for my local area and was surprised to see some local businesses who are expanding their businesses with websites that take pride in them being around for 20 years. Now if these people have been around for 20 years and are able to expand on their own, good for them. But they have been around for 20 years losing money and therefore are taking SBA loans (large ones mind you) to do all this expansion.
No differnet in techland.