
Ask HN: Money or Growth: what is it right to focus on? - dc17
Hey there!<p>Six month ago I had to make a choice if I should try to get initial traction on US market or just make money on my local market. We didn&#x27;t have any investment and our burn rate was about $4000-$5000&#x2F;mo. So all that time we were focusing on revenue but not growth. In our case we could start selling just in local market, not in the US.<p>Despite being profitable (we&#x27;ve made $33 000 and our costs have been $24 000), we don’t have growing customer base and every single deal takes huge efforts.<p>At the moment we have some competitors which have awesome growth rate (more 300% per month), but they are still not making profit. Probably if we had not focused on making money on local market, we would have been out of the game. However for investors we are not interesting and I feel that we&#x27;ve spent too much time on product features.<p>So my question is what is better for startup: growth or making money?
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brudgers
For a startup growth.

But, most new businesses are not startups in the way "startup" is defined in
Silicon Valley and among seasoned venture capital investors. Outside of those
communities, people use "startup" as a synonym for "new business". Ordinary
people may call new restaurants and new architecture firms and new Ebay
storefronts startups.

To put it another way, any business that is deciding between profitability and
growth probably isn't a startup in the narrow sense in which organizations
like YCombinator use the term. There are profitable startups, but they're
profitable and growing.

There's nothing wrong with not being a startup in the narrow sense. Odds are
that the competitor growing at 300% with no profits will run out of money and
die. Most startups in the narrow technical sense do.

On the other hand, being a startup in the technical sense can provide access
to investors seeking to maximize returns through equity growth rather than
continuous cash flows...i.e. venture capital. For a company that wants to
grow, this is a better alignment interests than with investors seeking
dividends.

Finally, investor interest is not a good target. The target should be user
interest. Building features should make customers happy. Making existing
features better is an alternative that may make customers even happier. The
goal is to make the product better.

A product can be good and not work in the US market. But it's more likely that
a good product for a local market can be adapted to it.

Good luck.

~~~
dc17
Thanks alot for the full answer and many great ideas. I agree with an idea
that not every new business is a start-up, but in our case we are SaaS startup
in YC definition of that term ) After some intern discussions we decided to
combine money making and growth as much as possible.

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sharemywin
if you can't get investors the answer is obvious you need to make enough to
cover expenses. then, if you can afford it reinvest in growth that's up to
you.

But if your not making 3x times what it costs to get a customer than you might
want to question your business. factor in time too.

~~~
dc17
We are not profitable, but we cover your costs. Thanks!

