As someone who has run a company for a decade, there are several meaningful inflection points:
* Becoming cash flow positive (aka Lift) is wonderful and stress relieving.
* Becoming profitable enough to start hiring lots of people and building a team culture marks a sea change in how you must think about your company and how you spend your time.
* Switching from growing to shrinking (albeit still profitable) changes the company culture, as everyone now feels like they're rats on a sinking ship. It's amazing how much people react to directional changes over absolute amounts (i.e., a company with $100K in annual revenue that doubled from last year is more positive than one with $20M that shrank by 20%).
a company with $100K in annual revenue that doubled from last year is more positive than one with $20M that shrank by 20%
I would expect that more than a predisposition to react to directional changes over absolute amounts, such a reaction would be due to individuals within the organization being concerned with their own personal fate. Being one out of two or three in a company with annual revenue of $100k that's doubling every year puts you personally in a very good position. Being one of 250 in a $20M organization that is shrinking by 20% annually...not so much.
It's Newtonian. People have no appreciation for how far you have come (position) or how fast you are going (speed), but they are extremely sensitive to acceleration. VCs especially so.
* Becoming cash flow positive (aka Lift) is wonderful and stress relieving.
* Becoming profitable enough to start hiring lots of people and building a team culture marks a sea change in how you must think about your company and how you spend your time.
* Switching from growing to shrinking (albeit still profitable) changes the company culture, as everyone now feels like they're rats on a sinking ship. It's amazing how much people react to directional changes over absolute amounts (i.e., a company with $100K in annual revenue that doubled from last year is more positive than one with $20M that shrank by 20%).