Should more companies going public follow Zoom’s example, doing it on expectations for GROWTH instead of for profitability?


This post is by Jason Lemkin from SaaStr


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Well, Zoom did both. It is both one of the fastest growing SaaS companies of all time AND one of the most capital efficient relative to its peer group. What’s the secret? There are several, but the #1 factor is that Zoom’s costs in each category are low compared to other Unicorns:
  • Sales costs are relatively low because much of the revenue comes from self-service. Not all, but enough to drive down the blended sales costs substantially.
  • Marketing costs are relatively low because 50%+ of new customers come at least partially virally / from freemium + free host sessions.
  • Engineering costs are relatively low because so much is done in China.
Zoom did not optimize for profitability. It optimized for the optimal combination of maximum growth + happiest employees and customers + essentially and strategically breaking even. More here: From Freemium to Explosive Growth in a Crowded Market – 8 of Learnings with Zoom (Video + Transcript) View original question on quora The post Should more companies going public follow Zoom’s example, doing it on expectations for GROWTH instead of for profitability? appeared first on SaaStr.

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