Profitability / growth expectations and the $100 million base hit.

Kevin Gao of Hyperink on why VCs don’t generally see dollar signs / hear jackpot noises over content based tech businesses.

When did a $100 million dollar business become a “base hit” and something one has to be “OK” with? While that’s not the sum of the points made and I’m not trying to harp on a straw man argument, something about the sentiment touches a sustainability nerve for me – growth for growth’s sake, Apple-sized market caps / valuations being the only indicators of performance. Obviously that’s what capital markets are about, the post is on Silicon Valley VC funding, and Gao later states it doesn’t need to be your goal. Besides, Hyperink seems to have a business model based on medium form priced content aimed at the long tail.

But I think the sentiment reflects the mindset that seems to pervade the tech-business scene, at least around the Valley – who will be the next boy king of the universe? It downplays the fact that there are many more businesses that make up a larger part of the economy that won’t ever see cancer like growth quarter over quarter or have “Pan-Galactic Domination” as the goal line. And they still manage to make their customers and owners happy in terms of problems solved and reasonable returns.

More power to building the next ten bagger if that’s the exit goal – but to extend the metaphor, having Ted Williams’ batting average connecting on solid base hits isn’t exactly bush league performance. With the meltdowns we’ve seen twice in the past 12 years, building something meaningful and sustainable isn’t a business goal that must be accepted with resignation.

Leave a Reply