Profitability = control of your own destiny

From Cash Flow and Destiny by Ben Horowitz:

When I sat down with my team and told them that we would generate positive cash flow no later than Q2 of 2003 and I planned to commit that to Wall Street, one of the best people on my team questioned the direction. He pointed to our low cash burn, money in the bank and long list of urgent features to be completed. He asked, “Why draw a line in the sand if we don’t have to?” Sometimes it takes a tough question like that to gather one’s thoughts. My response then is my response now to entrepreneurs who ask me this question:

“We should first decide how much we like laying people off, because if we love it then lets stay cash flow negative, because when we don’t generate cash, the capital markets decide when we have to lay people off. In fact, we will have to listen very carefully to investors on everything because as soon as they stop liking us, we will start dying. I don’t know about you, but I do not want to live my life that way. I do not want to have to tell all of our employees that we will do what we think is right until investors tell us we have to do otherwise. I want to control my destiny.”

6 thoughts on “Profitability = control of your own destiny

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