
Andreessen Horowitz Is Both Right and Wrong - lilbarbarian
http://www.littlebarbarian.com/andreessen-horowitz-is-both-right-and-wrong/#more-111
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api
"It’s not hard to generate massive revenue’s with a really bad business model.
One case study is Groupon and how, at one point, they were spending almost 80%
of revenues on marketing."

I've found the amount of marketing spend required to _sustain_ revenue to be a
contrarian indicator.

While "if you build it they will come" doesn't work in a pure sense (in most
cases), if you have a good product and business model it should "take off" on
its own at some point after you've primed the pump. It should not require you
to constantly ram it down the market's throat to sustain revenue. If revenue
has no "buoyancy" without marketing pushing on it, that's an indicator of
something that people maybe don't really want/need that much.

For example: if Apple ceased all of their marketing spend I would expect a
small revenue dip and a dip in growth but not a huge one. Their revenues would
not crash and burn. That's because people like them and tell their friends and
that would sustain some level of growth even without marketing spend.

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drb311
Don't forget the Horowitz in Andreessen Horowitz.

Ben Horowitz is an authority on management and I bet a17z investments get as
much focus on sustainability and fundamentals as anyone.

I recommend his blog [http://www.bhorowitz.com/](http://www.bhorowitz.com/),
and there's a book based on it too. It's a level headed management blog with
far less future gazing than you'd expect.

