[jseims]

As someone who has run a company for a decade, there are several meaningful inflection points:

* Becoming cash flow positive (aka Lift) is wonderful and stress relieving.

* Becoming profitable enough to start hiring lots of people and building a team culture marks a sea change in how you must think about your company and how you spend your time.

* Switching from growing to shrinking (albeit still profitable) changes the company culture, as everyone now feels like they're rats on a sinking ship. It's amazing how much people react to directional changes over absolute amounts (i.e., a company with $100K in annual revenue that doubled from last year is more positive than one with $20M that shrank by 20%).

[ryanwaggoner]

a company with $100K in annual revenue that doubled from last year is more positive than one with $20M that shrank by 20%

I would expect that more than a predisposition to react to directional changes over absolute amounts, such a reaction would be due to individuals within the organization being concerned with their own personal fate. Being one out of two or three in a company with annual revenue of $100k that's doubling every year puts you personally in a very good position. Being one of 250 in a $20M organization that is shrinking by 20% annually...not so much.

[jseims]

Good point.

[T_S_]

It's Newtonian. People have no appreciation for how far you have come (position) or how fast you are going (speed), but they are extremely sensitive to acceleration. VCs especially so.