I disagree wholly with the “revenue is easy, profit is harder” idea. I suppose it is tautologically true since profitable ventures are a subset of ones which generate revenue, so more businesses generate revenue than generate profits, thus it is is “easier”. However, that is only at the present instant. That statement does not factor in all the companies that generated only revenue and no profit and are now extinct. When considering these, it is vastly easier to be profitable than to have revenue.<p>Without infusions of external capital it is literally impossible to generate revenue without profit for any period longer than one can sustain their losses. Isn’t it way easier to focus on businesses that do this, that meet a demand people have, and are thus profitable? Instead, investments are made in areas where demand has to be induced via advertising spend, expenses have to be reduced by relying on the ability to “rapidly scale”, and the business has to sap round after round of investor capital at increasingly higher and increasingly more ridiculous valuations with the hopes that it can weather that storm.<p>When considering the above, it seems to me that we are systematically mis-allocating capital to bad investments. As the saying goes, a bird in the hand is worth two in the bush. You can see people behaving in accordance with this during high-risk periods, e.g. COVID, when capital shifted toward durable goods and physical assets (pre QE infinity). But for some reason, when the risk is not literally right in front of investors, they do not see it. That risk, the integral of which increases over larger periods of time, eats away at the growth rates of companies. I suspect risk would spoil the math that makes a lot of the high-growth companies worth anything, if it were properly accounted for. Not to mention, negative externalities are unknown and thus largely ignored in startups, and thus cannot be accounted for.