Patient for Growth, Impatient for Profits
I love great quotes, yes I do. Another great quote that really applies to a business owner in today’s economy is:
…the best money during the nascent years of a business is patient for growth but impatient for profit.
It’s from Clayton Christensen’s book The Innovator’s Solution: Creating and Sustaining Successful Growth. What he is basically saying is your business model better be making money, fast!
In the dot-com heyday, growth was everything. Number of users, number of sign-ups, number of registrations. “If we build it, they will come” was the mantra. It was all anyone talked about. Lacking from the conversation – or mentioned as an afterthought – was profitability.
In short, the companies were impatient for growth, but patient for profits.
This isn’t going to work anymore. In this economy, it’s profitability of puff – gone in a cloud of smoke. Ryan Janssen from GigaOM agrees:
Many startups focus on acquiring as many new users as possible, only figuring out later how to convert those users into revenue. There is no time for such a strategy in this market. You will run out of money before you get there.
And Stephan Schmidt from Code Monkeyism has a great article about why his VC-funded startup failed. It’s a great case study with a salient reminder to focus on sales – and profitability. Read it when you have a chance. And learn from his mistakes.
So repeat after me: “Patient for growth, impatient for profits! Patient for growth, impatient for profits! Patient for growth, impatient for profits!”
Boy, all this blogging is getting me impatient. Signing off now to go make some money!
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