Is Losing The New Winning? Top Tech Companies Lose Millions But Keep Doors Open

In the case of Twitter, it looks like being $577.82 million dollars in the hole was the breaking point for investors. The powers that be recently re-appointed former CEO and founder Jack Dorsey to the helm of the company and he has already announced layoffs. The company has spent an actual fortune doubling its workforce in two years but only increased its user base by 50 percent. That is what we would call a pretty bad return on investment.

These big companies on the losing list are very diverse and include a service management software firm (ServiceNow – $179.39 million), a car pricing website (TrueCar – $48.43 million) and a HR Management software firm (WorkDay – $172.51 million). They vary in their offerings, but are all spending way more than they make. Their plan may be to get so big, so inserted in their users’/customers’ lives that they become indispensable, but that level of dependency could be years away. Will investors continue to accept negative balances when they expect profitability?

Let’s be real, a company cannot grow without making sound investments in itself. From time to time this includes spending more money than you have currently so you can weather future storms successful. The multimillion question for these firms (and growing entrepreneurs) is do you have what it takes to make these investments pay off in the long run. If not, you should be planning to make changes quick (like Twitter is attempting).

Time will tell if these companies are on the right spending track. If not, we’ll be seeing more company shakeups at the leadership level in the next few months.