Here is an interview of the co-founder and CEO of Snapdeal, Kunal Bahl. Looks like the realisation is dawning on the sector that ultimately you got to make profits. The cycle continues and we may see repetitions of this in future, too. First, it is the GMV and then profits. It is the growth phase of any business or any company that you got to invest in the business first, and then look for profits. However, this is made out to be what is the right strategy right now.
Read the full interview here.
For an investor, the only thing that matters is how a company can make sustained profits over long periods. If the profits grow over the years, it’s even better. If the growth is faster than others, investors love such a company. However, in the beginning, when a company is establishing itself, there are chances that the investment phase of the business would see the company making losses. So long as the losses are temporary, it is ok. What we see is that making losses becomes a fashion statement and new theories are presented, “This is new normal”; “Making profits is so old-fashioned”, etc. The best one is “We will make up on volumes”.
Please remember, some fundamental truths would not change. The way they are presented, may change, though.
#RidingTheRollercoaster – 201