EBITDA is vanity. Revenue is ego. Cash in the founder's pocket is reality.
3 cash flow profiles every DTC founder should know:
→ Startup: −CFO, −CFI, CFF. You live off investors.
→ Scale-up: CFO, −CFI, flat CFF. You self-fund growth.
→ Mature: CFO, light CFI, deeply −CFF (dividends debt paydown). The cash machine.
How I'm dragging Novaalab from row 2 to row 3:
1/ Stop reinvesting 100% of CFO into growth. We cap reinvestment at ~70%. The rest is the dividend bucket.
2/ Kill SKU sprawl. Every new product = working capital trapped in inventory. Hero products carry the business.
3/ Fix retention before scaling spend. Repeat customer % from 11% → 25% is worth more than 30% ad spend.
4/ Price up, not down. A 10% price increase with -5% volume = more cash, less ops.
5/ Negotiate payment terms. 60 days supplier, 0 days customer = free working capital.
Growth is optional. Cash flow is the point.