The primary determiner of a startup’s success is its ability to sustainably grow revenue. This is the heart of the game. The other stuff matters — product, mission, culture, brand, press, investors, aesthetics, values — but is secondary to finding a good way to make money.
What I mean specifically is:
- Revenue is money from customers — simple.
- Growth is more money coming to the business as time goes on — recurring revenue, more customers, more spend from existing customers.
- Sustainable is being able to grow revenue indefinitely — a massive addressable market, favorable unit economics, happy customers, happy employees, favorable legal environment, a moat that protects from competitors, etc.
When framed in this way, the goal of a founder in the early days is very clear: find a way to get customers to give you money, make it sustainable, and make it growable. If you get a strategy for that right, the rest will follow.
So I think it’s often a mistake to set out asking – “What kind of business do I want to be the founder of? Or what kind of culture do I want to have?” For the most part, these questions are distractions from the task at hand: make money. They are important only to the extent they help you narrow your focus and manage your own psychology.
“You want it to be one way. But it’s the other way.” - Marlo, The Wire