Originally Posted by
Xirr
James. You set up the operating cost structure at the beginning that you can replicate going forward. If a company is making significant losses, you are gambling that they will be able to rein it in going forward without losing customers.
In that respect, your parroting of Rod's LTV is essentially worthless because there is no proof that they will ever be able to restructure their costs to actually create value. Gambling that Xero will somehow, someday manage to cut its costs enough to get to breakeven without losing customers is just that, gambling.
Xero, on the other hand, say "costs do not matter, revenue growth is all that is important". People who have financial pedigree and know the history of tech companies and aren't as blinkered as accountants who invest solely on the basis that they love the product, are calling Rod out on that, and fair enough.