🌰 Big Businesses Need To Compete To Survive Small Companies Hit Profitability Sooner And Easier

Big companies are beholden to a variety of bosses– including investors who, depending on whether the company is private or public, can expect 5-10% annual returns. Small businesses don’t have that pressure– they just need enough money to support a small team.
A $1M/year of revenue is a huge deal to a team of 3. It’s not worth talking about in a VC-funded startup. It’s the curse of VC funding.
I’m reminded of the tech crunch article about a cookie delivery business that was perfectly profitable (36% gross margins! 12% net profit!) but shut down because they weren’t poised to return the 10x, 100x that VC funding demands. Meanwhile, according to restaurant saas company Restaurant365, the average fast-casual restaurant has 6-9% net profit. Most small restaurant owners would love a 12% net profit.

Companies need to compete to win. They need to generate more revenue, or get more ownership in a company, to make their economics work than individuals do. Plus, companies typically move too slowly to take advantage of micro-opportunities in the way that individuals can.

Source: “The Cooperation Economy” by Packy McCormick

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Gabrielle de la Puente discusses Long Covid, being a writer and critic, and thriving vs surviving in how much money I made this year :

Of the 23K I made this year, 7 of it came from Patreon and Paypal donations – thank you – and 16 came from our book advance, a few bits of freelance work, and some remnants of last year’s DYCP grant. The book advance runs out next month, as done DYCP, so next year is looking like 7 grand and… I don’t know yet. I keep saying the words ‘I need to find a job’ but again, what job will accept someone who cannot be there for 9AM meetings? Someone who might have to call in sick quite regularly, who has lost the cognitive ability to do numbers, gained a bad memory, and can really only edit and write. Freelance editor? I did some mentorship over the past two years but taking money for mentorship always feels a little off to me, because really, I wish I was in a position to mentor from the promised land (for free).

I think, ‘well, I hope the book that we’re publishing next year sells well’ but what if it doesn’t? Book sales go towards paying back the advance, and only once that number is met, do you see royalties. That will be in 2025, if it ever happens. What if it doesn’t! Maybe that’s the end of that. End of The White Pube years. We’re almost at an even decade, so maybe I should give it up then. (I’m being dramatic and also, not really. Because as we’ve established, what else can I even do through the storm of chronic fatigue? I have no idea).

From In 2024, the Tension Between Macroculture and Microculture Will Turn into War:

A few days ago, I shared this comment from payment processor Stripe. But it was behind a paywall, and it’s so extraordinary that I really must quote it again:

In 2021, we aggregated data from 50 popular creator platforms on Stripe and found they had onboarded 668,000 creators who’d received $10 billion in payouts. We refreshed that data in 2023 and found something surprising: the creator economy is still growing about as fast as it was in 2021. Today, those same 50 creator platforms have onboarded over 1 million creators and have paid out over $25 billion in earnings.

In other words, legacy media is collapsing at the very moment that alternative platforms are booming.

Every post on this blog is a work in progress. Phrasing may be less than ideal, ideas may not yet be fully thought through. Thank you for watching me grow.

🌰 Big Businesses Need To Compete To Survive Small Companies Hit Profitability Sooner And Easier

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