Talking about valuation of a startup without looking at growth rate makes zero sense whatsoeverpic.twitter.com/YpDntw5aV2
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In other words, I don’t think the reporting was bad, but I think Flexport skeptics are wrong because they’re using the wrong equation to value the company, and when you’re wrong in missing a power law you’re *really* wrong
Appreciate the clarification as well. I didn’t want there to be people who read your tweet thinking we did a drive-by on this subject. It’s fair for people on both sides to critique the other in an educated manner.
The valuation for the early rounds looked irrational by industry standards too. But a few short years later, the biz is worth much more by the same standards. VCs pay tomorrow’s valuation, today. They bet on growth. The industry doesn’t, so not surprising it looks funny
Whatever skepticism there is from entrenched players is based on two factors: that startup investors don’t understand that there are established long term investors in logistics, and that the differentiation and margin in this industry are tough to carve out.
I don’t think differentiation is hard in this industry if you put a Product/Engineering team on the problem, rather than your IT department.
It’s a very big jump for most existing companies to think in any terms other than IT. Product/engineering is not a thing for them. I ran a training for new hires at Flexport and “Do not call us IT” was an important part of it, especially for folks from industry.
That is brilliant. I discovered this article and the other articles on this site in the last few weeks. https://svpg.com/product-vs-it-mindset/ … I’m pretty sure at least 80%+ of incumbents have nearly every single problem described in that article.
This post is excellent
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