Financial ratios and/or debt covenants compared to a reserved cash account - two different things. Sure, the cash account can be a small part of a debt covenant but is usually just that - a very small part.
Which debt covenants were breached? Often times they put these checks in when they think something bad is going to happen. Then a couple of years down the line they mean absolutely nothing, are breached (usually because the company has forgotten about one of them and accidently breaches them) and need to be restructured with the lender asking for something in return.
I would have thought this outcome logical and heartening - yet journos have a history of baby/bath-water syndrome.
If GDP is increasing (just, tick), large corporations are steady (fair assumption) then productivity increases are due to SMEs increasing productivity (ie. capital/labour ratio).
This assumed equation is qualified in commentary around VC fund size and investments - "it's the easiest and cheapest it has ever been to start a company."
This doesn't mean more start-ups, but if it were less, means less full-time equivalents for young companies.
Think SAAS, lean and cloud computing. This along with a new attitude to risk amongst investors post-GFC (no large bets), means this data makes sense yet they've got the story completely backwards.
People seem to be running in to the same problem everywhere - online communities degrade in quality as they scale.
PG spoke of this (an essay perhaps?).
Why should we be surprised? Culture is the most important thing in a business, morals to a person. Why would we be able to get it right online at scale without a few hiccups (and a lot of dissent).
I like to think about this criticism in the context of Twitter's recent API pullback and push towards advertising.
When a start-up raises at a valuation that is high, most assume current owners win and new owners lose. Yet I contend that everyone loses.
Setting a val that is too high means the profits needed to achieve a decent return are sky high. More importantly they are different from the early investors/founders.
How much of Twitter's recent strategy is being driven by their multi-million dollar investors (at multi-billion vals) wanting clarity on an exit plan? These guys put large quantums of money in and are pushing hard for dollars back. IMHO, they'll tank the company - all because they raised too much at too higher val.
At the end of the day it's best to have everyone in the company (post-deal) feeling like they got a good deal. Kinda like a partner/wife - you never want to feel like you're the one that's trading down in the relationship.
Same can happen at seed.
Disclosure: I invested in a YC company this round.
"At the end of the day it's best to have everyone in the company (post-deal) feeling like they got a good deal. Kinda like a partner/wife - you never want to feel like you're the one that's trading down in the relationship."
By definition someone is trading down. If the valuation is low, the company and its people lose out on potential money. The FB approach (extreme valuation), while discouraging most people, at least maximized value for those that liquidated at the IPO.
This iteration is for the masses, it's not for you.
It's for my mother (who is taking one-on-one classes in an Apple store), it's for my partner who is just starting to get work done on her phone (she's had an iPhone 4 since they came out) and its for everybody that's just trying to understand mobile.
Apple's network and ecosystem is now mature. Any change has to be so thoroughly considered. Anything at all risky (say NFC) gets binned until its proven because they can't upset what they have.
Unfortunately this isn't about technology, it's about strategy.
Yep, there seems to be a theme in tech world at the moment. Semi-fashionable bloggers jumping on hot topics and taking the high-road. I won't name names, but there are a few name brand VC's who are just writing columns for the sake of getting their name out there, adding no value what so ever and then doubling down on Twitter.
opmininion,
As a mass market service, Twitter has many more stakeholders than just management. And all these stakeholders have their own metrics.
Unfortunately at this point for Twitter, it's not just about optimizing this metric or that. They have millions of groups of people they need to satisfy (basically, everyone) at the same time as turning a buck.
Think of miners in SE Asia: digging up jungle to get to gold (Papua New Guinea). They have shareholders, management, employees, the local population, the local governement, the government where they are incorporated etc etc etc
Being a mass media consumer play like Twitter means the number of stakeholders you have is huge. And you have to keep them ALL happy to stay relevant (well, the majority... or a big number).
Too much code being committed? Too many decisions being made by engineers? Building a great product?
Wow, talk about navel gazing. I get the satire point, but...
This internally arrogant, externally ignorant attitude is why the stock is where it is. These ideals are not necessarily good for a mature business that needs to pay back the kind people that gave it money in the first place.
The stock price is where it is because various players hyped a $40B company into a $100B valuation. If you think that is a failure for anyone working at Facebook (except very recent hires who believed the hype when they evaluated their comp package), you are mistaken.
But more seriously, I think this is an all-too-human trait - once you are successful you start to greatly approve of yourself and look for reasons in your very DNA why you are where you are and then you start marketing that... when really, it was all a lot of luck and people seem to forget that pure chance is the biggest innovator and the bigger part of what they have actually done right is NOT spoiling the success that luck has brought them. There are and were a ton of companies with the same culture, the same great benefits for developers, the same productive environment but you never heard of them and they are gone now.
