I’m sensing confusion, because people are bringing up profitability, durability of growth, debt, competition, potential disruption, and other factors and risks. Of course that all matters and my post was not suggesting we ignore any of that. Let me try to restate what I was saying in other words:
Two of the major criteria Saul saw and valued back in 2018 were:
- Recurring (subscription) revenue
- Really high growth rates
For a brief time, we could have both of these. Now, we can’t, so my post was not just prescriptive, but descriptive. This is the way the world is now, and we must choose. Or as Saul put it:
For my part, I’m letting go of the recurring revenue requirement and holding onto the really high growth requirement.
Another way to say this is that I’m going with the big potential over the seemingly safe. In the last few years, I (to give just one example) watched APP go from $30 to $300 while I held Zscaler as it went nowhere (even with increasing revenue/profits). I ignored potential because I preferred predictable. I’m changing this.
If I can get both, amazing. But if this is a fork in the road (as my buddy Drowsy put it), and I have to pick one or the other, then I’m picking growth.
Bear