Eric is the co-founder and CTO of IMVU and is the author of The Lean Startup Methodology.
Would you rather have $30,000 or $1,000,000 in revenues for your startup? Sounds like a no-brainer, but I'd like to try and convince you that it's not.
This may sound crazy, coming as it does from an advocate of charging customers for your product from Day One. I have counseled innumerable entrepreneurs to change their focus to revenue, and many companies that refuse this advice get themselves into trouble by running out of time. Yet revenue alone is not a sufficient goal. Focusing on it exclusively can lead to failure as surely as ignoring it altogether.
Consider a company that has a million dollars of revenue and is showing growth quarter after quarter. Yet their investors are frustrated. Every board meeting, the metrics of success change. Their product definition fluctuates wildly—one month, it's a dessert topping; the next, it's a floor wax. Their product development team is hard at work on a next-generation product platform, which is designed to offer a new suite of products—but this effort is way behind schedule. In fact, this company hasn't shipped any new products in months. And yet their numbers continue to grow, month after month. What's going on?
The diagnosis is easy: The entrepreneurs are exceptionally gifted salesmen. This is an ...