Choosing Profitability Over Growth
How some startups refuse the usual path of extreme-growth and take the road less travelled.
Writing a pitch deck teardown about Buffer earlier this week, I discovered on Crunchbase that they had only taken in $4M in financing.
Trying to learn more about the terms and investors, I stumbled upon their corporate blog. I was aware Buffer was a successful company, but I didn’t know at what scale and how they got to where they are today.
As it turns out, they did so in a most unconventional way: they grew “slow” (VC-slow) and steady over the years.
Not only are they are a completely transparent corporation, giving out their real-time revenues, employee salaries, equity schemes, cost structure, everything is out there for anyone to read, but they also refused the growth at all costs traditional way of building a startup.
Even more than that, they put their money where their mouth is, and bought out their Series-A investors to focus on profitability and slow down growth.
Focus on profitability? What a strangely refreshing concept in the startup world!
After 10 years of operations, Buffer “only” makes around $21M in ARR. With a profit margin of around 25% (according to their CEO)…
