Valuing companies based on revenue multiples simplifies the process by avoiding numerous assumptions. However, when running the business, there are real but clear assumptions that guide decision making. This clarity helps in understanding the approach towards different products, their relationships, and associated infrastructure costs. Relying on a short-term, superficial version of business reality, such as 'fake' cloud products or 'fake' ARR, may initially make the business look good but will not hold up over time. Such approaches do not fulfill long-term expectations or have the attributes of sustainable SaaS products. Therefore, focusing on revenue multiples alone is not as insightful as understanding and using the underlying financial reality as a guide.

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