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.
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.
- Being a market leader in your home market is much more important (and usually cost effective) than growing internationally. Stripe still has a huge way to go in terms of 'crossing the chasm' in the US, moving out of SV bubble and in to the main-stream.
- Geographical acquisitions when expanding globally aren't necessarily a negative. Although they feel dirty, a lot of the time they can be a win/win for both players (quick foothold in the market, market leading position, entry certainty, local hires etc).
Having done my time in Excel and VBA, I can say as soon as you need to use VBA in Excel you're at the limit of what Excel can do.
It's a fantastic tool for visualising data, but as soon as you need to pass multiple data sets through an algo - you reach the limit of not only Excel, but the concept of visualising the entire working of an algorithm.
I'm not sure you can interpolate between the two situations.
One of the potential reasons behind both of these is that being sedentary in any position is essentially bad (in one way or another - a PhD out of Australia whose name escapes me has done the research here).
The body was built to move, giving extra options seems like a win and puts less stress on any one system (esp. musculo-skeletal).