Dispatches from DeepAnalysis(DA)
Got a good dispatch from DeepAnalysis(DA) today sparked, perhaps, by some of the recent conversations around the stay lean / quality growth topic.
The Greater Grower Theory – Entrepreneurs ignore profits and spend for growth in the hopes that they may one day sell to an acquirer that will ignore profits and spend for growth.
With all due deference to the “greater fool” theory of investing, I am sure.
I’ll let the dispatch stand on its own, but I believe it’s safe to say that DeepAnalysis(DA) thinks the issue of profitability is being ignored in this conversation i.e. you stay lean not just to de-risk but to earn and don’t ignore the implications of being substantively profitable[11.ie^2 in the sense of not just being at or above break-even, but rather in the sense of having a “profit story” in addition to your “growth story.”].