My Business Is Intentionally Unprofitable. Here’s Why

This expert opinion by Darpan Munjal, CEO and Founder of Atom, was originally published on Inc.com.

A decade ago, I founded a fashion e-commerce company. Like many early-stage founders, I followed the prevailing wisdom of the time: grow at all costs. We raised multiple rounds of venture capital, scaled rapidly, and hired hundreds of employees. Revenue was soaring, but there was a problem. A big one. We didn’t have a clear path to profitability.

We had focused on top-line growth, believing that profitability could come later. But when the funding environment shifted, our high customer acquisition costs and lack of recurring revenue made sustainability impossible. The business, ultimately, didn’t survive.

Fast-forward to my second startup, Atom.com—an AI-powered domain marketplace and branding platform. This time, I took a different approach. We bootstrapped from day one. The business is still not profitable today, but with one key difference: We could be, whenever we choose to.

Instead of chasing hypergrowth fueled by external capital, we run lean and have direct control over our profitability timeline. Even though we recently raised funds, our approach hasn’t changed. The biggest discretionary expense is marketing, and we reinvest every dollar of gross margin into product and growth. If we wanted to, we could scale back marketing and turn profitable overnight. But we don’t—because we know that long-term growth is a bigger priority than short-term profits.

This is the lesson I wish I had understood earlier: Reaching profitability isn’t a sprint, it’s a marathon. And the most important milestone to aim for? That’s the ability to be profitable when needed.

Why Early Profitability Can Be A Trap

There’s pressure, especially in early-stage companies, to prove you can make money as fast as possible. It feels responsible. But for most startups, that mindset can actually hold you back. 

When you’re focused on profit too early, you underinvest in areas that matter—product development, growth, customer support. You miss the chance to build momentum. 

At my first startup, we swung too far in the opposite direction, scaling recklessly without a clear roadmap to sustainability. At Atom.com, the balance is better: we’re focused on growing, but we also know exactly what levers we can pull if things change.

What Actually Matters More Than Profit (At First)

Trying to be profitable too soon can actually slow a startup down—but ignoring the path to profitability isn’t smart either. The real trick is incorporating flexibility. If a big chunk of your budget is something you can control—like marketing—you’ve got options. You can ramp it up when growth is your focus or pull back quickly if things tighten. That breathing room can be the difference between surviving and scrambling.

At the same time, your margins and unit economics need to make sense. Growth on paper means nothing if it’s not setting you up for long-term sustainability. And this is where LTV (lifetime value) comes into play.

A lot of startups get overly focused on CAC (customer acquisition cost). The thinking goes: The cheaper it is to acquire a customer, the better. But that’s only half the story. If your customers don’t stick around, it doesn’t matter how cheap they were to bring in. They’re not building your business—they’re just passing through.

The more important metric, especially if you’re in a space with repeat usage or subscription models, is LTV. That’s where the real leverage is. You want customers who don’t just buy once—they come back, they upgrade, they refer others. That kind of loyalty creates the kind of revenue that compounds over time.

At my first startup, we spent a lot to acquire customers, but they rarely came back. It was always a sprint to find new ones, and the economics just didn’t hold up. With Atom.com, the mindset is different. We’re building something that brings people back. If we lose a bit on the first purchase, that’s okay—as long as there’s a clear path to delivering more value (and getting more back) over time.

If you can shift your mindset from acquisition to retention, your growth becomes more meaningful—and your path to profitability a lot more predictable

How To Design A Business That Can Be Profitable Anytime

Being able to hit profitability whenever you need to is not just a luxury. It’s a strategy. One that can make all the difference when things get bumpy or the market shifts. Here’s how to set your business up for that kind of flexibility:

1. Get your unit economics right—this means healthy gross margins, recurring revenue, or scalable pricing. Without that base, everything else becomes a lot harder.

2. Figure out your biggest variable cost—every business has at least one area where spending can expand or shrink quickly. For us, it’s marketing. Yours might be different, but knowing where you’ve got room to maneuver is key.

3. Balance reinvestment with discipline—growth doesn’t come from throwing money around. Look closely at where your dollars are actually driving results—and don’t be afraid to cut what’s not working.

4. Think beyond the first sale—a lot of people get stuck on acquisition costs, but real value comes from what a customer brings in over time. If someone buys once and disappears, that’s not much of a win. Build something they want to come back to.

5. Avoid vanity metrics—vanity metrics can feel good, but they don’t build a real business. If your revenue is growing but margins are razor-thin—or if customers aren’t sticking—you’ve got a problem.

6. Know when to flip the profitability switch—you don’t need to be profitable from day one. But you should know exactly how to get there. When markets shift or growth slows, being able to flip that switch quickly can be a game changer. 

Why This Approach Changes Everything

The biggest difference between my two startups wasn’t just about money—it was about control.

With my first company, we didn’t have control. We relied on outside capital to survive, and when that dried up, so did our options. With Atom.com, we’ve built a business that we run on our terms. We can grow fast when it makes sense. We can slow down if the market changes. And we know exactly what it would take to be profitable at any moment.

That kind of flexibility is underrated. It lets you take risks, try new things, and reinvest in your product—without putting your survival at stake.

Companies like Shopify and HubSpot followed a similar model early on. They weren’t profitable right away, but they had strong fundamentals and a clear path. When the time came, they flipped the switch—and they were ready.

Final Thoughts

If there’s one thing I’ve learned from building two very different companies, it’s this: Don’t let profit drive your decisions too early. But don’t build a business that can’t be profitable either.

The best companies don’t just grow. They build the option to become profitable whenever they choose. That’s the edge—and it might be the only one that really matters when things get tough.

As a founder, your goal shouldn’t be to impress a spreadsheet. It should be to stay in the game long enough to win it.