Startups vs. Profitability: Maybe Not a Contradiction After All | Bolt Recs
Profit isn't the finish line — it's the starting line.
Many startup founders tend to prioritize growth and fundraising, assuming profitability is something that can wait. Recently, Karri Saarinen, CEO and co-founder of Linear.app, published a post on his blog titled "The Profitable Startup," sharing his entrepreneurial experience and lessons learned, with a focus on why companies need to be profitable and the methods he explored to get there.
We've organized and translated the author's article; you can access the original via the "Read Original" link.
For years, startups have been taught to prioritize growth above all else, with everything else taking a back seat. Thinking about profitability was once seen as unambitious, even wrong — something to worry about only after achieving scale. After all, when capital and valuations are readily available, why focus on profit?
But this mindset has been wrong from the start.
Profitability isn't a lack of ambition; it's a way to control your own destiny. It means you don't need to depend on investors to survive; it means you can focus on your vision and mission without others changing it; and it means you, as a founder, can set your own pace of growth. Once you've experienced the benefits of profitability, it's hard to imagine running a company any other way.
Paul Graham (founder of YC) once introduced the concept of Ramen Profitable, which became quite influential in Silicon Valley — the idea that a startup earns just enough to keep itself afloat without external funding. He argued that this state makes startups more attractive to investors because it demonstrates the ability to get customers to pay, a focus on building something valuable, and discipline in spending.
Graham wrote that piece in 2009. Today, I believe we live in an era where achieving Ramen Profitability — or even traditional profitability while still growing fast — is easier than ever.
At our company, we didn't set out to be profitable from the start; we stumbled into it somewhat by accident. We believed that to win in this market, we had to build an exceptional tool. And we felt the best way to achieve that was to keep the team small and focused. When we officially launched after a year in private beta, nearly all 100 of our beta users converted to paid. To our surprise, if we kept costs under control, profitability seemed within reach. Twelve months after launch, we became profitable and have remained so ever since.
I don't understand why hiring massive teams has become the norm for startup growth. In my experience, small teams consistently deliver higher-quality output with greater efficiency. Perhaps it's fear of missing out on growth opportunities, or investors whispering in your ear: "Your team looks understaffed compared to industry standards." But being understaffed should be a badge of honor, not a problem. People should be surprised by how small your team is, not how large.
What truly limits your growth isn't team size — it's your focus, skill, and execution. Larger teams typically mean slower progress, higher management overhead, more meetings, more disagreements, and often a dilution of vision and standards. Yet team expansion has somehow become a symbol of success.
At our company, we didn't hire our first employee until six months in, and we roughly doubled team size each year. With every hire, we made sure the new person would genuinely elevate the team. Rather than setting a target to hire 10 engineers, we focused on finding the next great engineer. This intentional approach to hiring allowed us to maintain both quality and culture.
1. The Peace of Mind Profitability Brings
The most underrated aspect of profitability is the immense peace of mind it brings. Once you're profitable, you stop worrying about survival and can focus on what truly matters: building an exceptional product, growing the company the way you want. No more optimizing for the next funding round — instead, you work to create real value.
While not every startup can become profitable quickly, I believe it's more achievable than most people think. If you're creating an entirely new market, or need massive user bases like social networks, or require heavy upfront investment like hardware companies, profitability may take longer. But if you're in an industry without large upfront capital requirements, and your product has market fit with customers willing to pay, profitability is likely within reach. Whether you achieve it usually depends on how fast and how large you hire.
2. Understand Your Product Characteristics
Is your product still uncertain about market demand? Or is it a new solution in an existing market? If it's the former, profitability may take longer; if the latter, it could come quickly. Most software today, especially in B2B, is essentially a modernized version of what already exists.
3. Hire Intentionally and Slowly
For most software startups, team size should be capped at 10 before finding product-market fit (PMF), not treated as a target. After achieving PMF, every hire should address a specific, urgent need rather than fill a box on an org chart. In my experience, deliberately slowing our hiring allowed us to be more selective and make better hiring decisions. It also protected our company culture, since rapid expansion often dilutes the very qualities that make startups distinctive. Fewer hires naturally lead to higher hiring quality.
4. Raise Funding on Your Own Terms
Being profitable doesn't mean you must oppose investors. It means you have options, and investors are very interested in companies that are both profitable and growing fast. You can choose to raise more, less, or nothing at all. You can wait for the right timing, the right partner, or the right firm. For most ambitious startups, fundraising remains a good option even if they can survive on their own. Investors can still help, and extra capital reserves enable larger investments or even acquisitions.
The key point is that startups can, and have every reason to, be profitable. Profitability isn't bad, isn't contradictory, and isn't as hard as people imagine. In fact, many successful companies were profitable early on — they just didn't talk about it publicly. Once profitable, your decisions are based on what's best for customers and the product, not on pleasing investors.
I didn't set out to build a profitable startup. But once my company became profitable, I realized I would never want to build a company any other way.
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