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Financial Misstatements

blog.samaltman.com

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131–140 of 194 posts

Re: Financial Misstatements

#131

Post by foolfoolz »

randall wrote: post #122
kevin wrote: post #8

Here's the biggest offenders I see when talking to founders: revenue vs GMV (if you give GMV, give me your cut/margin) contract vs LOI burn vs expenses users vs customers (customers pay) signups vs users vs active users (you should give active with time interval and measurement of active. eg. logged in last 30 days) profitable vs cash flow positive Others people should know: diff between retention rate vs churn rate…

What's voluntary vs involuntary churn? (googling but if anyone wants to save me the time) :) A: Voluntary churn occurs due to a decision by the customer to switch to another company or service provider, involuntary churn occurs due to circumstances such as a customer's relocation to a long-term care facility, death, or the relocation to a distant location. from: https://en.wikipedia.org/wiki/Customer_attrition

involuntary can also occur when you cannot renew for technical reasons, such as credit card rejected. these aren't always fraud related, you can have someone who wants to pay you but cant anymore.

Re: Financial Misstatements

#132

Post by [deleted] »

randall wrote: post #122
kevin wrote: post #8

Here's the biggest offenders I see when talking to founders: revenue vs GMV (if you give GMV, give me your cut/margin) contract vs LOI burn vs expenses users vs customers (customers pay) signups vs users vs active users (you should give active with time interval and measurement of active. eg. logged in last 30 days) profitable vs cash flow positive Others people should know: diff between retention rate vs churn rate…

What's voluntary vs involuntary churn? (googling but if anyone wants to save me the time) :) A: Voluntary churn occurs due to a decision by the customer to switch to another company or service provider, involuntary churn occurs due to circumstances such as a customer's relocation to a long-term care facility, death, or the relocation to a distant location. from: https://en.wikipedia.org/wiki/Customer_attrition

[deleted]

Re: Financial Misstatements

#133

Post by pitt1980 »

evo_9 wrote: post #121

Mr. Altman is talking about the basic misunderstanding of these terms and it's surprising to me that he didn't take a bit of time to define the terms himself. Maybe I'm naive and those terms are a lot harder to define than I'm imagining, but even then some references linking to other sites could have been provided. I really enjoy reading Sam's posts and I'm usually bookmarking and/or forwarding his articles to a ton…

yeah, this seems like some YC would be well positioned to either provide as reference, or give a pointer to an appropriate reference

Re: Financial Misstatements

#134

Post by ixtli »

jsprogrammer wrote: post #5

>This is a felony and it’s called fraud, even though it’s usually unintentional. This is incorrect. Fraud requires intent. Otherwise it's just negligence. Should probably throw a legal dictionary in with the financial one.

Thank you. I came here to see if someone pointed out the irony of his misusing a legal term in a post admonishing people for misusing business terms.

EDIT: It looks like he ninja-edited the post as it no longer said what I'd read the first time.

Re: Financial Misstatements

#136

Post by ISL »

kevin wrote: post #8

Here's the biggest offenders I see when talking to founders: revenue vs GMV (if you give GMV, give me your cut/margin) contract vs LOI burn vs expenses users vs customers (customers pay) signups vs users vs active users (you should give active with time interval and measurement of active. eg. logged in last 30 days) profitable vs cash flow positive Others people should know: diff between retention rate vs churn rate…

For those who didn't realize the difference between expenses and burn (I'd always equated them):

"Your burn rate is the speed at which your cash balance is going down."

http://avc.com/2011/12/burn-rate/

Re: Financial Misstatements

#137

Post by [deleted] »

kevin wrote: post #8

Here's the biggest offenders I see when talking to founders: revenue vs GMV (if you give GMV, give me your cut/margin) contract vs LOI burn vs expenses users vs customers (customers pay) signups vs users vs active users (you should give active with time interval and measurement of active. eg. logged in last 30 days) profitable vs cash flow positive Others people should know: diff between retention rate vs churn rate…

[deleted]

Re: Financial Misstatements

#138

Post by npalli »

dsugarman wrote: post #22
kevin wrote: post #8

Here's the biggest offenders I see when talking to founders: revenue vs GMV (if you give GMV, give me your cut/margin) contract vs LOI burn vs expenses users vs customers (customers pay) signups vs users vs active users (you should give active with time interval and measurement of active. eg. logged in last 30 days) profitable vs cash flow positive Others people should know: diff between retention rate vs churn rate…

I've probably been guilty of this but I think revenue & GMV can be confusing terms based on how a lot of commerce works via the internet. For reference, our company used to do dropship e-commerce. Amazon, for example, uses revenue for first party sales and GMV for third party marketplace, Amazon never owns the product in third party marketplace. If you are a dropship retailer though, you have flash ownership because…

Two quick points

1. You have switched the terms in your amazon example. Amazon uses GMV for 1st party and revenue (its cut of GMV) for 3rd party marketplace.

2. Why would you have flash ownership in a dropship model? Seems to me that would be a regular wholesale/retail model not dropship.

Re: Financial Misstatements

#139

Post by jsprogrammer »

scrumper wrote: post #17
jsprogrammer wrote: post #5

>This is a felony and it’s called fraud, even though it’s usually unintentional. This is incorrect. Fraud requires intent. Otherwise it's just negligence. Should probably throw a legal dictionary in with the financial one.

Article doesn't say "and it's called fraud". Maybe it's been edited since you quoted.

The article has been edited without notice of modification.

I don't know if a public reversion history is kept or if any of the caching engines picked up the version that I saw.

First instincts of business is often to obfuscate, bury, and ignore. It's not completely unexpected or unusual.

I've actually noticed quite a bit of text on HN that gets modified over time, often with no public revision history or even notice of modification.

Bug? Feature? Oversight? Not sure.

Re: Financial Misstatements

#140

Post by jdoliner »

From the TC article about Uber today:

> This year, the firm expects to clock $10.84 billion in revenue which — calculating the 20 percent commission that it takes — should bring in around $2 billion in revenue for the year.

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