sandeep

Sambhar mein bhindi kon daalta hai bey????????????

Warning: Political Ideology May Impair Your Ability to Reason “[I]f you’re not careful, ideology won’t just shape your opinions; it’ll hijack your ability to reason altogether.” [Link below.]

“The zero to $100m in a year is the new norm” narrative is getting out of hand. It’s silly, but there’s a breed of VCs who chase speculation driven returns that loooove this talk track. I met a very successful VC recently. He had one of these super hyped startups in his portfolio. He said it’s a wait-and-see for him bc revenues that grow that fast can also shrink in the same speed. He instantly won my respect bc I’ve seen this many times myself. These unnatural early stage growth curves (will call it ultra high growth) happen for a few different reasons. Most of the time there’s a temporary supply demand imbalance for a good that becomes highly in demand over night. There were COVID testing labs that went from 0 to $1b+ revenue in a year when the pandemic broke. These days it’s the AI infra / compute companies. Initially both demand and prices skyrocket simultaneously which creates ultra high growth. Eventually competition comes in, prices normalize, margins shrink, growth slows down and valuations tank. If you sold your company before that, congrats. There’s a different type of ultra high growth that comes after a long gestational period and a breakthrough. It’s rare. Usually an experienced team who knows the (difficult) problem and customers well is behind them. Pharma biz works this way most of the time. The security company Wiz that got acquired by Google for $32b was another good example. OpenAI is another great example. The reason this pattern isn’t common in tech is improvements usually happen in incremental iterations vs breakthroughs. One problem is companies in the first category try to paint themselves as if they’re in the second category. There may be a 3rd category where a company just goes viral but it still takes a while of hard work to turn that into revenue. It still took TikTok, Facebook, Instagram etc years to become a real business. We forget about the other 100 apps that went to 30m users very quickly and then back to zero. Lastly sometimes it’s possible to spend $70m on paid acq and generate $100m profitably but this category isn’t that interesting. Hyper casual game companies do this all the time. Recap in the next tweet