A question that I often hear debated these days is whether a new startup should focus on growth or profits. First of all, the glory days of “dot.coms” are gone, when investors “didn’t care” about profitability, and all the money went to growth.
In the long run, everyone wants both profitability and growth, but the question is still which comes first. Most startups and investors I know don’t have unlimited funds, so the first question they should ask and do ask today, is “When is your company going to be profitable (self-sustaining)?”
Of course, growth is implied in that equation, and is also required for maintaining a sustainable competitive advantage. The challenge is not to undermine growth by a blind focus on profits. You might sell one of two of your widgets for $1 million each, entering profitability immediately, but then die because you can’t grow sales at that price.
To read the full, original article click on this link: Startup Professionals Musings: Without Deep Pockets, Profitability Trumps Growth
