[i_am_proteus]

And if you cut costs in a (prospective or current) operating area from 120% of revenue to 90% of revenue, you've opened up an entire new operating area to profitably grow in.

Developing the technology to do a thing profitably that previously could not be done profitably is the stuff unicorns are made of.

[abakker]

Absolutely! I hope my reply didn't imply that I thought there was no value in doing things more efficiently. There clearly is, and as consumers we love marginal gains in product quality, efficiency, and price.

I'll nitpick a bit to ask, though, how many times has a new entrant to a market gotten a process/business/tool/etc from 120% operating to 90% through marginal gains? I'd wager almost never. Process improvement can be marginal or stepwise/punctuated. I think most unicorns create punctuated change in ossified industries, but, I don't think any big companies are likely to hire a data scientist and through years of grinding through the margins achieve that 30% improvement.

put differently, the decision to focus on revenue vs profit is a decision that typically does not include the NPV of R&D investments. those are uncertain and have some probabilistic value, but not so much in accounting terms.

[marcosdumay]

Competition in mature industries is all about processes costs becoming 110% or 90% of revenue, usually through a series of marginal changes.

That's not how unicorns are made, but it's how most of the economy operates.