> or are building a house of cards that will eventually collapse (or just cost them obscene amounts of money to keep on life support)
Ding ding ding. It's this.
> The whole CapEx vs. OpEx issue drives me batty
Seconded. I can't help but feel like it's not just a "I don't understand money" thing, but more of a "the way Wall Street assigns value is fundamentally broken." Spending $100K now, once, vs. spending $25K/month indefinitely does not take a genius to figure out.
> Spending $100K now, once, vs. spending $25K/month indefinitely does not take a genius to figure out.
If you multiply your month payment for 1/i, where i is the interest rate your business can get, you will get how much of up-front money it's worth.
... that is, until next month, when the interest rate will change, a fact that always catches everyone by surprise, and you'll need to rush to fix your cash-flow.
So, yeah, I don't understand that either. Somehow, despite neither of us understanding how it can possibly work, it seems to fail to work empirically too, adding a huge amount of instability to companies.
That is, unless you decide to look at it from the perspective of executive bonuses, that are capped to 0, but can grow indefinitely. So instability is the point.
Ding ding ding. It's this.
> The whole CapEx vs. OpEx issue drives me batty
Seconded. I can't help but feel like it's not just a "I don't understand money" thing, but more of a "the way Wall Street assigns value is fundamentally broken." Spending $100K now, once, vs. spending $25K/month indefinitely does not take a genius to figure out.