- Bloomberg West
As venture capitalists touted the need to grow fast and raise money during the past two years, Postmates CEO Bastian Lehmann is glad he ignored them.
“If I had to take on face value all the advice VCs gave us the last two years, we wouldn’t be here,” Lehmann said onstage at Startup Grind conference in Redwood City, California on Tuesday.
For years, venture capitalists have been pushing hypergrowth over profits. Investors told Lehmann to reinvest the company’s money in pushing more growth over building a sustainable business.
That advice didn’t go far with the Postmates CEO. He’s already stated he wants to be profitable by 2016, and his job was to make sure his company was on that path.
“The last fundraise we probably could have had a valuation of $100 or $150 million more,” Lehmann said. “What happens two months later? There is a readjustment.”
Now that the pendulum has swung from growth to profits, investors are starting to expect good margins on products and a path to profitability.
Lehmann argues that its the CEO’s fundamental job to have looked at the margins and made decisions early on.
“Companies that run for the last two years in hyper growth are now wondering how to make money,” Lehmann said. Although he would not reveal any of his business’s metrics, Lehmann argues that Postmates is clearly in a better position to survive the readjustment happening in Silicon Valley.