When revenue growth slows down for a technology startup, a company’s value creation framework cannot only be revenue growth. It needs to evolve and cover efficiency, free cash flow and other metrics as well. This is a part of what Big Tech is doing right now, driven by lower growth and higher interest rates.
On the Invest Like The Best podcast the authors of Lessons From The Titans (covering how some of the best industrial companies are operating) are interviewed about the topic.
For small startups revenue growth (with software gross margins) still is the best value creation metric, if you only chose one.
Transcript and on Spotify.
