Profitability focus at young companies

Extracted Attributes

• Key Metrics

  EBITDA, Unit Profitability, Burn Rate, and Customer Acquisition Cost (CAC)

• Award Received

  Best Trend of the Year (Bestie Awards)

• Trend Category

  Business and Economic Strategy

• Economic Driver

  Higher interest rates and reduced venture capital availability

• Recognition Year

  2023

• Primary Objective

  Financial independence and sustainability

Timeline

• Startups began shifting focus toward profitability as venture capital funding became more selective due to rising interest rates. (Source: Web Search Results)

  2023-01-01

• The All-In Podcast hosts officially named the renewed profitability focus at young companies as one of the 'Best Trends' of the year during the fourth annual Bestie Awards. (Source: Document 47c5a1f9-3bf9-4d68-ae85-a92717b28f78)

  2023-12-01

General Electric

General Electric Company (GE) was an American multinational conglomerate founded in 1892, incorporated in the state of New York and headquartered, during its final year of operation, in Boston. Over the years, the company had multiple divisions, including aerospace, transportation, energy, healthcare, lighting, locomotives, appliances, and finance. In 2020, GE ranked among the Fortune 500 as the 33rd largest firm in the United States by gross revenue. In 2023, the company was ranked 64th in the Forbes Global 2000. In 2011, GE ranked among the Fortune 20 as the 14th most profitable company, but later very severely underperformed the market (by about 75%) as its profitability collapsed. Two employees of GE—Irving Langmuir (1932) and Ivar Giaever (1973)—have been awarded the Nobel Prize. From 1986 until 2013, GE was the owner of the NBC television network through its purchase of its former subsidiary RCA before its acquisition of NBC's parent company NBCUniversal by Comcast in 2011. Following the Great Recession of the late 2000s, General Electric began selling off various divisions and assets, including its appliances and financial capital divisions, under Jeff Immelt's leadership as CEO. John Flannery, Immelt's replacement in 2017, further divested General Electric's assets in locomotives and lighting in order to focus the company more on aviation. Restrictions on air travel during the COVID-19 pandemic caused General Electric's revenue to fall significantly in 2020. Ultimately, GE's final CEO Larry Culp announced in November 2021 that General Electric was to be broken up into three separate, public companies by 2024. GE Aerospace, the aerospace company, is GE's legal successor. GE HealthCare, the health technology company, was spun off from GE in 2023. GE Vernova, the energy company, was founded when GE finalized the split. Following these transactions, GE Aerospace took the General Electric name and ticker symbols, while the old General Electric ceased to exist as a conglomerate.

Web Search Results

• How soon should your startup focus on profit? - Founders Network

  Mark Suster, a 2x entrepreneur turned VC, agrees that focus should be on profit and puts it like this: “Most companies (98+%) in the world (even tech startups) should be very profit focused. Being profitable allows you degrees of freedom you don’t have when you rely upon other people’s money.” It simply provides you with more opportunities and makes the startup sustainable much faster. [...] Mark Suster, a 2x entrepreneur turned VC, agrees that focus should be on profit and puts it like this: “Most companies (98+%) in the world (even tech startups) should be very profit focused. Being profitable allows you degrees of freedom you don’t have when you rely upon other people’s money.” It simply provides you with more opportunities and makes the startup sustainable much faster. [...] Logo # How soon should your startup focus on profit? When to Focus on Profit We recently closed our startup, Publisha (which later became ViewsHound), and one of the most important lessons I want to share with you concerns when your startup should focus on profit, rather than growth.

• The New Rules of Growth vs. Profitability - NFX

  For early-stage companies, a singular focus on revenue may not be appropriate as you may be better off building a large number of engaged relationships that are lightly monetized or free where you can expand. It could be strategically important to build out a large number of relationships and ultimately reduce your CAC and strengthen the network. [...] The basic idea is that startups in the early stage should be high growth and the priority is on unit or cohort profitability, not overall company profitability as the company invests in product development and scale. However, they should chart a path “gliding” towards more moderate growth and profitability across the entire business as the business matures and scales. Let’s take a closer look at the tactical implications of the Startup Glide path for each stage in a startup’s life. [...] Deeply understanding cohort profitability is critical at this stage. Are many of the most mature cohorts highly profitable? If so, this will give you confidence that you can continue to invest and scale the business rapidly, and also demonstrate to future investors that incremental investment has a clear payback. The presence of network effects should enable continued profitability of these cohorts and growing retention and where possible adding in reinforcement techniques to further the

• Why Rapid Growth is Critical to Your Early-Stage Startup Strategy

  In this article, we’ll dive deep into the discussion between growth and profitability and why focusing on balanced growth in the early stages will give your startup the best chances of becoming a thriving business even in challenging economic conditions. ## Profit vs. Growth Strategy at Early-Stage Startups While profitability is the ultimate goal of any company, when launching a new startup, the early days are all about speed and scale. [...] The classic venture capital (VC)-funded startup model is to focus on value creation before turning to value capture, which is why VCs want to see startups in big markets, with a path to becoming big players. However, a premature focus on profit at the early stage can come at the cost of growth — making your startup less attractive to investors looking for a potential 10x return at a minimum. [...] ## Why Rapid Growth is Critical to Your Early-Stage Startup Strategy As a startup founder, you’ve most likely asked yourself some variation of the age-old question: “Do we focus on growing our business and gaining market traction, or do we focus on becoming profitable to sustain our business?” This is one of the most important yet complex questions your startup will face in its early years.

• The New Startup Balancing Act: 5 Strategies to Move to Profitability

  profitability. Startups looking to move to profitability must take strategic risks – cutting in one area while investing in another, regularly revisiting what’s working and what isn’t, and shifting strategies at each stage. [...] Balancing growth against profitability is a central challenge for every startup. The key is developing the right plan to fit your stage, optimizing processes accordingly, tracking the metrics that matter, and revisiting them regularly to assess whether changes are needed. It’s also valuable to find a financial partner who has seen similar companies through the same types of challenges. Pattern matching can be extremely powerful in the right hands. It’s one of the many ways Propeller Industries [...] Moving toward profitability requires effective management of working capital. Many early-stage businesses overlook how the balance sheet can be used to calculate metrics and find opportunities to improve working capital. For example: ### 4. Cut Burn By Strategically Cutting Expenses

• 7 Strategies to Boost Tech Startup Profitability and Scale Growth

  ## Tech Startup Strategies to Increase Profitability [...] the path to positive EBITDA, which is projected to hit $643,000 in 2029 Focus on reducing the Customer Acquisition Cost (CAC) from the starting $150 toward the target of $120 while simultaneously increasing the Trial-to-Paid conversion rate from 150% to 240% This is the defintely fastest way to decrease the 55-month payback period [...] 7 Strategies to Boost Tech Startup Profitability and Scale Growth ## 7 Strategies to Increase Profitability of Tech Startup