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Comment by hn_throwaway_99 | Hacker News Reader

Don't think that's necessarily a really good metric in this day and age, as there are "good" kinds of unprofitability and "bad" kinds of unprofitability. Amazon was unprofitable for most of its existence until relatively recently. Most successful startups are unprofitable, and these days with the "winner take all" mentality of most VCs a company would be penalized for being profitable too early.

I think a much better metric, especially for early stage companies, is their growth rate, their customer acquisition cost, and very importantly, their customer churn rate. Blue Apron's churn rate coupled with their high CAC has always been a giant flashing red flag.

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I think "good" unprofitable basically boils down to "only unprofitable because what would otherwise be profit is being immediately reinvested into growth (marketing, new employees, better third party software/hardware etc)".

And the bad unprofitably is usually a variation on selling dollars for .95 to try and capture a market (to charge 1.05) or build up infrastructure/scale that will eventually let you produce them for .94 cents

That has to both pan out and pan out before they run out of money.

Not my area but I get the impression Amazon has done a lot of both of what the above two posts call "good" unprofitability and "bad" unprofitability.

> Most successful startups are unprofitable

What a bizarre world we live in where this is said seriously and everyone would agree with it.

There’s a vc bubble and it’s going to pop. And we will all suffer for it.

Why do you think it's bizarre? It's also true. The whole reason Silicon Valley is the center of the entrepreneurial and tech universe is because it's the place that best merges technical talent with access to capital. If startups could be profitable from the get go, VCs wouldn't need to exist in the first place.

I agree with most of what you’ve said. I would not consider a company with 2500 employees to be an early stage company.

Blue Apron’s high churn rate was probably tied to their offering of free deliveries. That’s how I found out about it and received my first delivery. I did not continue as a subscriber after that, though.

I didn't use Blue Apron but I did use their direct competitor, Hello Fresh, for a while. As a software engineer I was actually extremely impressed with their app and the service overall, but at the end of the day I found out that I really don't like to cook all that much.

These services occupy an incredible difficult niche: people who love to cook will just find it cheaper to buy the ingredients themselves, while lots of others folks like me are more in love with the idea of cooking, but the price ends up being about the same as fresh, healthy, pop-it-in-the-microwave options like Snap Kitchen.

So wealthier, single people with some anxiety that stops them from going to a supermarket? :D

For that there is Uber Eats.

> "winner take all" mentality of most VCs a company would be penalized for being profitable too early

This can go the other way too, I know that I've found myself being more selective in which companies products I use based on their business model and if they're look like a stable company, too many flash and burns.

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