How can software and online-services companies determine the right balance between growth and profitability?
It is clear to most in the software and technology community that the days of growth at any cost are behind us, at least for now. Of course, growth is still important—it remains one of the most important factors in valuation, access to capital, and shareholder return, as well as the ability to attract top talent. Although some companies, investors, and shareholders are still focused solely on rapid growth, many in the start-up ecosystem are increasingly pushing for sustainable growth, which balances high growth rates with evidence of a path to profitability. These investors and operators view sustainable growth as the leading indicator of a software company’s overall health and potential.
