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Great realization, I'm happy for you. But now to the next step: are you trying to grow revenue or profit? The strategies are vastly different. When building pro

Great realization, I'm happy for you. But now to the next step: are you trying to grow revenue or profit? The strategies are vastly different. When building profit, you need to keep costs as low as possible. When building revenue, you increase costs as much as you can afford in a way that grows revenue as fast as possible, perhaps throwing even the idea of profit out the door. Focusing on revenue is awesome. Throwing in the extra "and profit" feels like the safe thing to do, but in reality your execution will be completely different with profit in the equation.

marcamillion 16y ago
Martin, I fully agree. I threw it in there to show that the argument isn't just myopic on revenues alone. The reality is that web apps and sites that generate monthly recurring revenue come in many forms. Either the microprenuer variety (i.e. one man shop) or the larger VC-backed startup (ala dropbox, etc.). Depending on your situation it really is up to you to decide to swing the pendulum whichever way you want to go. For example, Dropbox would likely focus on growing revenues as fast as possible, sacrificing profits in the short term - and that's a perfectly respectable decision because they have tons of VC cash in the bank and makes total sense. So that was just shorthand for me saying that once you make that mental shift from advertising/eyeballs/uniques to monthly recurring revenues, you can then decide how you want to tackle the profit question (more now or later).
- martinkallstrom 16y ago
  I think the mechanics around how your thinking about growth, revenue, profit and costs affects your execution are among the most "unknown unknowns" among entrepreneurs. But only because this is where my greatest realizations have appeared during the last couple of years. I know now that in reality I knew nothing when I started my company. And unfortunately you mostly learn stuff like this in hindsight. In conclusion: great post and great topic, keep writing about stuff like this.
  - marcamillion 16y ago
    Thanks for the encouragement. Will definitely keep trying to :)

marcamillion 16y ago

Martin, I fully agree. I threw it in there to show that the argument isn't just myopic on revenues alone. The reality is that web apps and sites that generate monthly recurring revenue come in many forms. Either the microprenuer variety (i.e. one man shop) or the larger VC-backed startup (ala dropbox, etc.). Depending on your situation it really is up to you to decide to swing the pendulum whichever way you want to go. For example, Dropbox would likely focus on growing revenues as fast as possible, sacrificing profits in the short term - and that's a perfectly respectable decision because they have tons of VC cash in the bank and makes total sense. So that was just shorthand for me saying that once you make that mental shift from advertising/eyeballs/uniques to monthly recurring revenues, you can then decide how you want to tackle the profit question (more now or later).

martinkallstrom 16y ago
I think the mechanics around how your thinking about growth, revenue, profit and costs affects your execution are among the most "unknown unknowns" among entrepreneurs. But only because this is where my greatest realizations have appeared during the last couple of years. I know now that in reality I knew nothing when I started my company. And unfortunately you mostly learn stuff like this in hindsight. In conclusion: great post and great topic, keep writing about stuff like this.
- marcamillion 16y ago
  Thanks for the encouragement. Will definitely keep trying to :)