versus

Enterprise, Fintech

“Ripple’s President Envisions Even Greater Growth for Payment and Enterprise Ventures After 12 Years”

Although Ripple has been around since 2012, it and the XRP Ledger are doubling down on its global payments journey. At the same time, it’s also aiming to become the go-to enterprise infrastructure provider, the company’s president, Monica Long, said on TechCrunch’s Chain Reaction podcast. Distinct from the Ripple network and protocol, the XRP Ledger is a decentralized public ledger with an open source code base that anyone can contribute to or use, Long said. “Foreign exchange is pretty concentrated in terms of the players who actually have enough capital to provide liquidity for those transactions,” Long said. “And so when you have a lot of concentration, you have a lack of competitiveness for the pricing.”

Max Chen
January 21, 2024

Uncategorized

The Dominance of X: Approaching Growth and Profit in the Cloud Industry

Businesses are working hard to conform to traditional heuristics like Rule of 40 (i.e., the idea that the sum of revenue growth and profit margin should equal 40%+, a metric that Bessemer helped popularize). The world has over-rotated into an FCF margin mindset over a growth mindset, which is backward for growing efficient businesses. Long-term models show that even in tight markets, growth should be valued at least ~2x to 3x more than FCF margin. While a margin increase has a linear impact on value, a growth rate increase can have a compounding impact on value. We show the detailed math below, and it’s confirmed by public market valuation correlations when you backtest the relative importance of growth versus FCF margin.