Learn · a trick with a name
The Annualiser
one good period, multiplied out.
Multiplying a great month by twelve feels like arithmetic. It is really a forecast wearing arithmetic's clothes.
How to spot it
- Words like run-rate, annualised or ARR next to a young company
- A single month or quarter doing all the work
- No mention of churn, seasonality or one-off deals
The one question to ask“Which period was multiplied, and was it the best one?”
At work
Ask for trailing twelve months of actual revenue, not the run-rate. Price deals and valuations off what was banked.
Caught in the wild
Every time we've caught it so far. Try calling each one before you open it.
- TRUE, BUTAnthropic says it's making $65 billion. Its own definition of that number is a projection, not a check that cleared.
- TRUE, BUTOpenAI just announced the number that proves it will miss its own target.
- TRUE, BUTAnthropic is pitching investors a $2 trillion IPO built on a revenue forecast that requires 4.3x growth in under two years, from a company that posted its first quarterly profit three months ago on a discounted compute bill.
- TRUE, BUTStripe agreed to pay $7 billion for a company that routes API calls between AI models. It was worth $1.3 billion three months ago. Estimated revenue multiple: 50x.
- TRUE, BUTCognition's revenue is nearing $1 billion, say sources in its $40 billion fundraise talks. A month ago the company itself said $500 million plus.
- TRUE, BUTHarvey's 15.5 billion dollar valuation is being reported as a milestone. It is a negotiating position: an unclosed round, sourced to people in the talks, at 44 times an annualized run rate, and the headline number includes the money being raised.