Profitability Vs Growth

Omama Ansari
Aug 23, 2017 · 1 min read

The dilemma that every startup post product/market fit go through is either be profitable or grow fast. Both are mutually exclusive.

Let’s have a real world example. Uber which is in more than 70+ countries and is the highest valued startup in the world is losing money fast and getting beaten by local competitors at the same time.

While Didi Chuxing which is only based in China have strategically invested in Uber rivals all around the world. This makes it the largest ride hailing cab service in the world.

This shows that growing fast without a plan can really be a recipe for disaster.

Growth is important, no doubt about it, but scaling your business is an art. If you don’t do it right, you may end up losing what you have built. It’s very easy to get carried away and put all your eggs (capital) in one basket but if you run out of cash, you’re done!

A profitable company focuses on making money rather than raising it. By doing so, the company grows organically with little to no external capital. This helps in retaining the control over the company and eventually become sustainable.

Both factors are essential for the health of the company but you need to tread carefully when choosing one over another.

You just need to find the sweet spot between the two.

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Omama Ansari

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Interested in tech, startups & food but not necessarily in that order.

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