The company would have had to raise at least $35 million in venture capital to have funded operations like this. More likely it raised $50 million or more. Note that it likely raised this in 2-3 tranches, not all up front or all at once.
Crazy? Stupid? Should it have slowed down operating costs in order to "make a profit."
Again, it depends. If the growth is as spectacular as it is here and IF they have access to cheap capital then they'd be crazy not to have raised the VC and instead stayed unprofitable.
This is the trade-off between profits & growth. You can drive profits up by not investing today's dollars in tomorrow's growth.
The next time a journalist wants to slam Amazon (AMZN) for not being more profitable I wish they'd understand this. Amazon is continuing to grow at such a rapid pace that of course it should take some of today's profits and reinvest them in growth.
If there is a company that can't grow fast enough then they should do other things with their profits, like return it to shareholders.
Mark Suster joined GRP Partners in 2007 as a general partner after selling his company to Salesforce.com. He focuses on early-stage technology companies. He blogs at Bothsidesofthetable.com.