Silicon Valley startups raise and spend huge amounts of capital (the curve at the bottom that dips very deep) to invest in growth, often subsidizing the cost to the consumer to drive usage. The hope is that the revenue line will shift upward and increase exponentially. As revenue scales, assuming costs don’t scale commensurately, profitability eventually sneaks past zero (the bottom of the cash curve) and grows rapidly beyond. This strategy can work well for startups that successfully make it through the valley of death by achieving rapid user growth and economies of scale.
