You Can But You Don't Have To
On profitability, freedom, and the quiet rebellion of building a business on your own terms.
In 2019, the startup world was deep in a unicorn frenzy. WeWork was about to implode, Uber and Lyft had gone public at massive valuations with no path to profitability, and the dominant narrative was still scale-or-die. Softbank was writing billion-dollar checks like party invitations. We thought something fundamental was missing from the conversation: the idea that profitability isn’t a consolation prize. It’s freedom. We made it the theme for PIRATE Summit 2019 and called it #intheblack.
Every year at PIRATE Summit, we burned a wooden statue, 6 to 8 meters tall, set ablaze at the end of the event. And every year, before the fire, there was a speech - not a keynote, a moment. A distillation of everything the theme was about, said out loud to a crowd of founders who’d spent 3 days together.
The 2019 burn speech was about profitability - about why being #intheblack deserves celebrating, not dismissing. About the Fortune Five Million. And about the kind of entrepreneurship we believe in.
Here is what I said that night.
The Burn Speech
Why did you decide to become an entrepreneur? What motivates you?
There are as many reasons as there are entrepreneurs. But there are some common patterns: “I seek freedom.” “I want to solve this problem.” “I want to build something meaningful.” Or: “I couldn’t imagine doing anything else.”
When we founded the PIRATE Summit back in 2010, we wanted to organize it around that same energy. Around the people that have the urge to create something meaningful and valuable. The people that solve problems worth solving and those who strive for independence.
For entrepreneurs who want to build companies at their own pace and appreciate the journey more than the destination, knowing that the odds are against them. That’s pretty much how pirates lived. And it’s why we called it PIRATE Summit.
You can - but you don’t have to
The reality often looks quite different. Most founders start a company on their own terms but end up building it on someone else’s. Because - so the typical startup wisdom goes - you need to look for capital early on to jumpstart your business.
But this capital comes with strings attached. Venture Capital needs an exit within a decade and its business model requires hyper growth. In the end, only a few make it.
Don’t get me wrong. We need Venture Capital. What we see as a problem is that it’s often perceived as the only path to success.
There are other ways to build businesses. One of them is an early focus on being cash flow positive and profitable, also known as #intheblack.
Once you are #intheblack, you can - but you don’t have to - look for external funding. You can - but you don’t have to - aggressively pursue growth. You can - but you don’t have to - prepare for an exit.
Can you see the pattern?
You can - but you don’t have to.
Profits bring great flexibility and freedom of choice. It is all about keeping optionality.
As a startup the future is uncertain. Keeping your options open matters. And a startup is very much like a child. What if you had to decide right at birth what your kid will become when it grows up? You wouldn’t feel comfortable about it!
Being profitable should be cool and celebrated
Entrepreneurship at its core is about freedom, serving and creating value. Building a business on your own terms is a big part of this freedom.
You want to go 10x or die? Go for it. You want to go for sustainable growth? We applaud you. You work from 9 to 9, 6 days a week like in China? It wouldn’t be our way but, ultimately, it’s the founders’ choice. You can - but you don’t have to.
Somehow being profitable has a bad reputation in the startup world. Profitable businesses are often referred to as “lifestyle” businesses. If you are not going for hyper growth you are not doing it right. If you are not raising money, you are not ambitious enough.
Being profitable should be cool and celebrated. Building a company with 5 million EUR in revenue and 500k in profit every year is a success. To us that sounds like a REAL business.
In the startup world we talk about profitability as an event. It isn’t. Profitability is a habit. If you get to spend a lot of money, you’re going to be really good at spending money. If you have to make money from day one, you’re going to be really good at making money.
Fortune Five Million
Imagine a world with a lot of innovative businesses that are #intheblack. Right now, when it comes to innovation, the US and China are kicking our asses. If we want to stay relevant in Europe, we need to build on our strengths. Europe is built on hundreds of thousands of small and medium businesses.
Therefore, instead of only focusing on the Fortune 500 startups, we’d love to see more of the Fortune Five Million emerge. A strong interwoven network of profitable businesses. REAL businesses. And in order to achieve that we need more VCs and we need more venture capital to fund moonshots. But we need many, many, many more founders. And especially those that are proud of being #intheblack.
Today we celebrate
Today we celebrate every entrepreneur...
...that works hard to create value.
...that strives to be #intheblack.
...that struggles every day to be able to pay salaries on time.
...that takes on VC money to build a moonshot idea.
...that builds a calm company.
...that has failed but gotten back up.
And we celebrate all the VCs that understand this message.
Today we will burn in celebration of entrepreneurship. Let the flames be a symbol of our praise and our respect and our admiration.
For all those pirates that are on the journey.
For all those pirates that are building REAL businesses.
For all those pirates that are building the Fortune Five Million.
Let it burn.
#intheblack was the theme of PIRATE Summit 2019. It was preceded by Purposeful Disruption in 2018 and followed by #SolveRealProblems in 2020.
🙏
Be kind,
Manuel