Today’s Growth & Tomorrow’s Values

Austin Clements
4 min readOct 22, 2019

In October of 2009, exactly 10 years ago, Mark Zuckerberg introduced the world to Facebook’s motto, “move fast and break things.” It was a breakout year for a startup with unprecedented growth, so the entire tech industry was paying close attention. As a result, “move fast and break things” was a concept that spread like gospel. Looking back today, I don’t think there’s any phrase that better captures the ethos of the tech industry over the last decade.

But as that motto was passed down from startup to startup, year after year, the message became more distorted. “move fast” ushered in an era that rewarded growth at all costs, even when it meant a company spending more than it makes on each customer. It has reached a point that this year only 24% of companies that filed to go public reported positive net income. That’s the lowest rate in the 20 years since the dot com bubble era. Equally mismanaged was the “break things” part, which now seems to include laws, social contracts, and customer trust.

As this decade comes to a close, it appears we’re finally awakening to how unsustainable that behavior really is. But why are we all of a sudden paying attention? And more importantly, what comes next?

Impossible Public Offerings
For the last several years near-term profitability fell low on the list of startup priorities (or was outright discouraged). Instead, startups prioritized growing the market and their market share before creating any economic value. However, if a company sells dollar bills for 75 cents each it is not creating economic value. This still holds true even if it does this a few billion times over and has people lining up to buy them.

Negative earnings in the early years of a startup has long been a part of venture capital, but its actually negative gross margins that have been driving a lot of the growth across the industry in the last decade.

Venture investors put a premium on growth, with the implicit assumption that its presence is an indication things are going well with the business. This used to be true, but over the last decade growth has become entirely decoupled from value creation. Growth is treated as a manufactured commodity, a skill you can hire for, or a team you can spin up. In tech, growth is viewed as…