3 ms·
The article makes excellent points all around. The #1 goal of any business is to gain positive cash flow (revenues greater than expenses). Anything else sinks
by willheim 16y ago
The article makes excellent points all around. The #1 goal of any business is to gain positive cash flow (revenues greater than expenses). Anything else sinks your business. It's high time start-ups learned that lesson.
Sure, starting out you need to gain traction. You do that by:
1) having a superior product
2) gaining a superior rep
The only way to have a superior product is to identify your target market. Nothing in life is "free". If you want to offer a service to your clients that cost them nothing out of pocket you better be pulling in revenue in other ways (advertising or info selling). Since many are averse (privacy issues and ad-block) to those other options you must charge your user base.
Your product doesn't have to be the one with the most features, just the one whose features are the best executed.
Your product has to meet the client's needs. If you don't know who your target client is (Everybody is not an appropriate answer) then you need to refine your pitch. Part of client needs eventually comes down to support and interaction. If you spend all your resources (time, server, bandwidth, development opportunities) supporting a vast number of free clients at the expense of revenue generating clients you will quickly gain no to poor reputation.
Note: I tried to figure out what Evernote is doing. Their free service does meet the vast majority of user's needs (including mine). The amazing thing is that their service is so simple and straight forward that perhaps they don't need to spend so many resources on support and with the API (Trunk) and partnerships their development/expansion costs are now being taken on by so many other parties. I'm sure they bled cash brutally at the beginning but their product was so novel and amazing that VC money came to the rescue. Fact is that there are few start-ups in such a position. There are also few products out there so novel that users talk about not "needing to" but "wanting to" contribute to their success. Twitter? Ha! But Evernote is different. People want to pay them for their service even if they don't need to upgrade. They just love it so much. That is a truly rare and beautiful thing.