And Spotify is a piss poor business, has never been profitable and its costs scale directly with its revenue.
It’s contractually obligated to give its suppliers 70% of its revenue and its major competitors consider its whole reason for being just a tiny feature.
A feature that IPOed and is currently with a market cap of $24B. Please let me know where I can invest in more of such features, because the ROI is huge.
So now the idea of a successful company is “what it IPOd for” not “whether it makes a profit”?
Spotify had a market cap of $26 billion at IPO. It’s now worth $24.2 billion. If you had bought the stock at IPO and held onto it your ROI would have been negative. The VCs and investment bankers would have counted you as one of “the greater fools” (https://www.investopedia.com/terms/g/greaterfooltheory.asp).
By comparison, the S&P 500 is up 50% since Spotify’s IPO
This is a discussion on VC investment strategy. So the question is more like: if you invested in Spotify series A or B and exited at IPO did you have a good RoI? The answer is yes, you had an extremely good ROI.
> My bootstrapped mobile gaming company achieved success…
He was specifically talking about a company not getting VC funding and “growing profitably”. In the last decade or so, I can’t think of one tech company that was profitable before it IPOd.
