seeing a lot of confusion around why layoffs are happening at companies with a lot of cash on the balance sheet. at the risk of getting roasted... here's a TLDR, for both public and private companies

in 2020 and 2021 the way to create shareholder value was to grow topline. regardless of the quality of revenue, software revenue was being valued at between 30x-100x run rate

smart investors know that not all revenue is equal... and they know that very few software businesses actually have the characteristics to drive meaningful cash flow at scale

because meaningful cash flow at scale requires a high margin product, high retention, and an ability to upsell and cross sell to drive increasing LTV. once you land, you need to expand share of wallet, continuously. for decades

many software categories fundamentally cannot ever support a company with these characteristics. history tells you this... but we forget!