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I was actually hoping for this response. This is something that I fundamentally feel like many startups/companies miss: You should not be pursing any activity t
by aerophilic 7y ago
I was actually hoping for this response. This is something that I fundamentally feel like many startups/companies miss:
You should not be pursing any activity that is not inherently profitable given your cost structure.
Let me say this a different way, if you can expect $10 of revenue, the absolute most you can spend is $10-your minimum profit margin (for normal businesses... for VC backed, it is more about “value/market share creation for eventual earnings).
If you can not do the above, while ensuring the value, you are in the wrong business.
Business 101 dictates you spend less than you earn. The question is can you really do it given your cost structure. I would go even further that if you cant afford to pay what the market dictates to achieve a specific business outcome, you should not be pursuing that business outcome in the first place.