It's ok and even desired to be unprofitable if you're gaining revenue at a reasonable cost and have 100%+ net dollar retention, meaning you never lose customers and expand them. To estimate the acceptable cost of new SaaS revenue, we compare new revenue to operating loss and payback period. If you pay back the customer acquisition cost in 1.5 years and never lose them (100%+ NDR), you're doing well.

To evaluate payback period, we compared new revenue to net operating loss for the last 73 SaaS companies to IPO since October 2017. (55 out of 73). Here's the data. 1/(new revenue/operating loss) equals payback period. New revenue/operating loss equals cost of new revenue.

Payback averages a year. 55 SaaS companies that weren't profitable at IPO got a 1-year payback. Outstanding. If you pay for a customer in a year and never lose them (100%+ NDR), you're establishing a valuable business. The average was 1.3 years, which is within the 1.5-year range.

New revenue costs $0.96 on average. These SaaS companies lost $0.96 every $1 of new revenue last year. Again, impressive. Average new revenue per operating loss was $1.59.

Loss-in-operations definition. Operating loss revenue COGS S&M R&D G&A (technical point: be sure to use the absolute value of operating loss). It's wrong to only consider S&M costs and ignore other business costs. Operating loss and new revenue are measured over one year to eliminate seasonality.

Operating losses are desirable if you never lose a customer and have a quick payback period, especially when SaaS enterprises are valued on ARR. The payback period should be under 1.5 years, the cost of new income < $1, and net dollar retention 100%.

People-first update.

Every Google upgrade causes website owners to panic.

Some have just recovered from previous algorithm tweaks and resumed content development.

If you follow Google's Webmaster rules, you shouldn't fear its adjustments.

Everyone has a view of them. Miscommunication and confusion result.

Now, for some (hopefully) exciting news.

Google tweeted on August 18, 2022 about a fresh content update.

This change is another Google effort to remove low-quality, repetitive, and AI-generated content.

The algorithm generates and analyzes search results, not humans.

Google spends a lot to teach its algorithm what searchers want. Intent isn't always clear.

Google's content update aims to:

“… ensure people see more original, helpful content written by people, for people, in search results.”

Isn't it a noble goal?

However, what does it mean for content creators and website owners?

How can you ensure you’re creating content that will be successful after the updates roll out?

Let's first define people-first content.

What does "people-first-content" mean?

If asked, I'd say information written to answer queries and solve problems.

Like others, I read it from the term.

Content creators and marketers disagree. They need more information to follow recommendations.

Google gives explicit instructions for creating people-first content.

According to Google, if you answer yes to the following questions, you have a people-first attitude.

1. Do you have customers who might find your content useful if they contacted you directly?

2. Does your content show the breadth of your knowledge?

3. Do you have a niche or a focus for your website?

4. After reading your content, will readers learn something new to aid them in achieving their goals?

5. Are readers happy after reading your content?

6. Have you been adhering to Google's fundamental updates and product reviews?

As an SEO writer, I'm not scared.

I’ve been following these rules consciously while creating content for my website. That’s why it’s been steadily growing despite me publishing just one or two stories a month.

If you avoid AI-generated text and redundant, shallow material, your website won't suffer.

If you use unscrupulous methods to boost your website's traffic, including link buying or keyword stuffing, stop. Google is getting smarter and will find and punish your site eventually.

For those who say, “SEO is no longer working,” I dedicated the whole paragraph below.

This does not imply that SEO is obsolete.

Google:

“People-first content creators focus on creating satisfying content, while also utilizing SEO best practices to bring searchers additional value.”

The official helpful content update page lists two people-first content components:

• meeting user needs

• best practices for SEO

Always read official guidelines, not unsolicited suggestions.

SEO will work till search engines die.

How to use the update

Google said the changes will arrive in August 2022.

They pledged to post updates on Google's search ranking updates page.

Google also tweets this info. If you haven't followed it already, I recommend it.

Ranking adjustments could take two weeks and will affect English searches internationally initially.

Google affirmed plans to extend to other languages.

If you own a website, monitor your rankings and traffic to see if it's affected.

And retire sooner.

Books can make you filthy rich.

If you apply what you learn. In 2011, I was broke and had broken dreams.

Someone suggested I read finance books. One Up On Wall Street was his first recommendation.

Finance books were my crack.

I've read every money book since then. Some are good, but most stink.

These books will make you rich.

The Almanack of Naval Ravikant by Eric Jorgenson

This isn't a cliche book.

This book was inspired by a How to Get Rich tweet thread.

It’s one of the best tweets I’ve ever read.

Naval thinks differently. He nukes ordinary ideas. I've never heard better money advice.

Eric Jorgenson wrote a book about this tweet thread with Navals permission. A must-read, easy-to-digest book.

Best quote

Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy — Naval

Morgan Housel's The Psychology of Money

Many finance books advise investing like a dunce.

They almost all peddle the buy an index fund BS. Different book.

It's about money-making psychology. Because any fool can get rich and drunk on their ego. Few can consistently make money.

Each chapter is short. A single-page chapter breaks all book publishing rules.

Best quote

Spending money to show people how much money you have is the fastest way to have less money — Morgan Housel

J.L. Collins' The Simple Path to Wealth

Most of the best money books were written by bloggers.

JL Collins blogs. This easy-to-read book was written for his daughter.

This book popularized the phrase F You Money. With enough money in your bank account and investment portfolio, you can say F You more.

A bad boss is an example. You can leave instead of enduring his wrath.

You can then sit at home and look for another job while financially secure. JL says its mind-freedom is powerful.

Best phrasing

You own the things you own and they in turn own you — J.L. Collins

Tony Robbins' Unshakeable

I like Tony. This book makes me sweaty.

Tony interviews the world's top financiers. He interviews people who rarely do so.

This book taught me all-weather portfolio. It's a way to invest in different asset classes in good, bad, recession, or depression times.

Look at it:

Investing isn’t about buying one big winner — that’s gambling. It’s about investing in a diversified portfolio of assets.

Best phrasing

The best opportunities come in times of maximum pessimism — Tony Robbins

Ben Graham's The Intelligent Investor

This book helped me distinguish between a spectator and an investor.

Spectators are those who shout that crypto, NFTs, or XYZ platform will die.

Tourists. They want attention and to say "I told you so." They make short-term and long-term predictions like fortunetellers. LOL. Idiots.

Benjamin Graham teaches smart investing. You'll buy a long-term asset. To be confident in recessions, use dollar-cost averaging.

Best phrasing

Those who do not remember the past are condemned to repeat it. — Benjamin Graham

The Napoleon Hill book Think and Grow Rich

This classic book introduced positive thinking to modern self-help.

Lazy pessimists can't become rich. No way.

Napoleon said, "Thoughts create reality."

No surprise that he discusses obsession and focus in this book. They are the fastest ways to make more money to invest in time and wealth-protecting assets.

Best phrasing

The starting point of all achievement is DESIRE. Keep this constantly in mind. Weak desire brings weak results, just as a small fire makes a small amount of heat — Napoleon Hill

Ramit Sethi's book I Will Teach You To Be Rich

This book is mostly good.  The part about credit cards is trash.

Avoid credit card temptations. I don't care about their airline points.

This book teaches you to master money basics (that many people mess up) then automate it so your monkey brain doesn't ruin your financial future.

The book includes great negotiation tactics to help you make more money in less time.

Best quote

The 85 Percent Solution: Getting started is more important than becoming an expert — Ramit Sethi

David Bach's The Automatic Millionaire

You've probably met a six- or seven-figure earner who's broke. All their money goes to useless things like cars.

Money isn't as essential as what you do with it. David teaches how to automate your earnings for more money.

Compounding works once investing is automated. So you get rich.

His strategy eliminates luck and (almost) guarantees millionaire status.

Best phrasing

Every time you earn one dollar, make sure to pay yourself first — David Bach

Thomas J. Stanley's The Millionaire Next Door

Thomas defies the definition of rich.

He spends much of the book highlighting millionaire traits he's studied.

Rich people are quiet, so you wouldn't know they're wealthy. They don't earn much money or drive a BMW.

Thomas will give you the math to get started.

Best phrasing

I am not impressed with what people own. But I’m impressed with what they achieve. I’m proud to be a physician. Always strive to be the best in your field…. Don’t chase money. If you are the best in your field, money will find you. — Thomas J. Stanley

by Bill Perkins "Die With Zero"

Let’s end with one last book.

Bill's book angered many people. He says we spend too much time saving for retirement and die rich. That bank money is lost time.

Your grandkids could use the money. When children inherit money, they become lazy, entitled a-holes.

Bill wants us to spend our money on life-enhancing experiences. Stop saving money like monopoly monkeys.

Best phrasing

You should be focusing on maximizing your life enjoyment rather than on maximizing your wealth. Those are two very different goals. Money is just a means to an end: Having money helps you to achieve the more important goal of enjoying your life. But trying to maximize money actually gets in the way of achieving the more important goal — Bill Perkins

After viewing its insanity, I had to leave this platform.

I joined LinkedIn recently. That's how I aim to increase my readership and gain recognition. LinkedIn's premise appealed to me: a Facebook-like platform for professional networking.

I don't use Facebook since it's full of propaganda. It seems like a professional, apolitical space, right?

I expected people to:

• be more formal and respectful than on Facebook.

• Talk about the inclusiveness of the workplace. Studies consistently demonstrate that inclusive, progressive workplaces outperform those that adhere to established practices.

• Talk about business in their industry. Yep. I wanted to read articles with advice on how to write better and reach a wider audience.

Oh, sh*t. I hadn't anticipated that.

After posting and reading about inclusivity and pro-choice, I was startled by how many professionals acted unprofessionally. I've seen:

• Men have approached me in the DMs in a really aggressive manner. Yikes. huge yikes Not at all professional.

• I've heard pro-choice women referred to as infant killers by many people. If I were the CEO of a company and I witnessed one of my employees acting that poorly, I would immediately fire them.

• Many posts are anti-LGBTQIA+, as I've noticed. a lot, like, a lot. Some are subtly stating that the world doesn't need to know, while others are openly making fun of transgender persons like myself.

• Several medical professionals were posting explicitly racist comments. Even if you are as white as a sheet like me, you should be alarmed by this. Who's to guarantee a patient who is black won't unintentionally die?

• I won't even get into how many men in STEM I observed pushing for the exclusion of women from their fields. I shouldn't be surprised considering the majority of those men I've encountered have a passionate dislike for women, but goddamn, dude.

Many people appear entirely too at ease displaying their bigotry on their professional profiles.

As a white female, I'm always shocked by people's open hostility. Professional environments are very important.

I don't know if this is still true (people seem too politicized to care), but if I heard many of these statements in person, I'd suppose they feel ashamed. Really.

Are you not ashamed of being so mean? Are you so weak that competing with others terrifies you? Isn't this embarrassing?

LinkedIn isn't great at censoring offensive comments. These people aren't getting warnings. So they were safe while others were unsafe.

The CEO in me would want to know if I had placed a bigot on my staff.

I always wondered if people's employers knew about their online behavior. If they know how horrible they appear, they don't care.

As a manager, I was picky about hiring. Obviously. In most industries, it costs $1,000 or more to hire a full-time employee, so be sure it pays off.

Companies that embrace diversity and tolerance (and are intolerant of intolerance) are more profitable, likely to recruit top personnel, and successful.

People avoid businesses that alienate them. That's why I don't eat at Chic-Fil-A and why folks avoid MyPillow. Being inclusive is good business.

CEOs are harmed by online bigots. Image is an issue. If you're a business owner, you can fire staff who don't help you.

On the one hand, I'm delighted it makes it simpler to identify those with whom not to do business.

Don’t get me wrong. I'm glad I know who to avoid when hiring, getting references, or searching for a job. When people are bad, it saves me time.

What's up with professionalism?

Really. I need to know. I've crossed the boundary between acceptable and unacceptable behavior, but never on a professional platform. I got in trouble for not wearing bras even though it's not part of my gender expression.

If I behaved like that at my last two office jobs, my supervisors would have fired me immediately. Some of the behavior I've seen is so outrageous, I can't believe these people have employment. Some are even leaders.

Like…how? Is hatred now normalized?

Please pay attention whether you're seeking for a job or even simply a side gig.

Do not add to the tragedy that LinkedIn comments can be, or at least don't make uninformed comments. Even if you weren't banned, the site may still bite you.

Recruiters can and do look at your activity. Your writing goes on your résumé. The wrong comment might lose you a job.

Recruiters and CEOs might reject candidates whose principles contradict with their corporate culture. Bigotry will get you banned from many companies, especially if others report you.

If you want a high-paying job, avoid being a LinkedIn asshole. People care even if you think no one does. Before speaking, ponder. Is this how you want to be perceived?

Better advice:

If your politics might turn off an employer, stop posting about them online and ask yourself why you hold such objectionable ideas.

He kept it under wraps for years until he legally couldn’t.

His shirt is incomplete. I can’t stop thinking about this…

Actually, ignore the article. Look at it. JUST LOOK at it… It’s quite disturbing, isn’t it?

Ughh…

Me: “Hey, what up?” Friend: “All good, watching lord of the rings on amazon prime video.” Me: “Oh, do you know how Amazon grew and became famous?” Friend: “Geek alert…Can I just watch in peace?” Me: “But… Bezos?” Friend: “Let it go, just let it go…”

I can question you, the reader, and start answering instantly without his consent. This far.

Reader, how did Amazon succeed? You'll say, Of course, it was an internet bookstore, then it sold everything.

Mistaken. They moved from zero to one because of this. How did they get from one to thousand? AWS-some. Understand? It's geeky and lame. If not, I'll explain my geekiness.

Over an extended period of time, Amazon was not profitable.

Business basics. You want customers if you own a bakery, right?

Well, 100 clients per day order $5 cheesecakes (because cheesecakes are awesome.)

$5 x 100 consumers x 30 days Equals $15,000 monthly revenue. You proudly work here.

Now you have to pay the barista (unless ChatGPT is doing it haha? Nope..)

• The barista is requesting $5000 a month.

• Each cheesecake costs the cheesecake maker $2.5 ($2.5 × 100 x 30 = $7500).

• The monthly cost of running your bakery, including power, is about $5000.

Assume no extra charges. Your operating costs are $17,500.

Just $15,000? You have income but no profit. You might make money selling coffee with your cheesecake next month.

Is losing money bad? You're broke. Losing money. It's bad for financial statements.

It's almost a business ultimatum. Most startups fail. Amazon took nine years.

I'm reading Amazon Unbound: Jeff Bezos and the Creation of a Global Empire to comprehend how a company has a $1 trillion market cap.

Many things made Amazon big. The book claims that Bezos and Amazon kept a specific product secret for a long period.

Clouds above the bald head.

In 2006, Bezos started a cloud computing initiative. They believed many firms like Snapchat would pay for reliable servers.

In 2006, cloud computing was not what it is today. I'll simplify. 2006 had no iPhone.

Bezos invested in Amazon Web Services (AWS) without disclosing its revenue. That's permitted till a certain degree.

Google and Microsoft would realize Amazon is heavily investing in this market and worry.

Bezos anticipated high demand for this product. Microsoft built its cloud in 2010, and Google in 2008.

If you managed Google or Microsoft, you wouldn't know how much Amazon makes from their cloud computing service. It's enough. Yet, Amazon is an internet store, so they'll focus on that.

All but Bezos were wrong.

Time to come clean now.

They revealed AWS revenue in 2015. Two things were apparent:

1. Bezos made the proper decision to bet on the cloud and keep it a secret.

2. In this race, Amazon is in the lead.

They continued. Let me list some AWS users today.

• Netflix

• Airbnb

• Twitch

More. Amazon was unprofitable for nine years, remember? This article's main graph.

AWS accounted for 74% of Amazon's profit in 2021. This 74% might not exist if they hadn't invested in AWS.

Bring this with you home.

Amazon predated AWS. Yet, it helped the giant reach $1 trillion. Bezos' secrecy? Perhaps, until a time machine is invented (they might host the time machine software on AWS, though.)

Without AWS, Amazon would have been profitable but unimpressive. They may have invested in anything else that would have returned more (like crypto? No? Ok.)

Bezos has business flaws. His success. His failures include:

• introducing the Fire Phone and suffering a $170 million loss.

• Amazon's failure in China In 2011, Amazon had a about 15% market share in China. 2019 saw a decrease of about 1%.

• not offering a higher price to persuade the creator of Netflix to sell the company to him. He offered a rather reasonable $15 million in his proposal. But what if he had offered $30 million instead (Amazon had over $100 million in revenue at the time)? He might have owned Netflix, which has a $156 billion market valuation (and saved billions rather than invest in Amazon Prime Video).

Some he could control. Some were uncontrollable. Nonetheless, every action he made in the foregoing circumstances led him to invest in AWS.