Project 2012: Day 159

We’ve already spoken about instrumenting your business, and counting the things that should be counted. But what are these things?

Well, hopefully, sales!

That’s it.

What about the operational model?

Yes you can count clicks, and traffic, and app downloads, and stickiness, and usage, etc. etc. But unless any of these metrics lead to getting $$ in the door, you’re counting the wrong thing. Or rather, you’re not counting the right thing.

I know, I know. Google was about search and links and relevance. But the monetisation was about counting where they could put adverts to generate revenue.

Facebook was about traffic, and stickiness, and connections for the “social graph.” But again, their revenue is driven by advertising or selling to that social graph.

Let’s face it

You aren’t Google, or Facebook, or Twitter, and hopefully not MySpace either.

So you should be counting money in the door, minus money out the door. If the money in the door is investment, the surplus is your runway. If the money in the door is revenue from sales, the surplus is your profit.

As a start-up you want to shift from runway to profit (i.e. take-off) and the only way you can do that, is to count sales.

And then

Once you’re counting sales, in $$, you can then plan around it. Determine quotas, and product development, and any number of things.

But you have to be counting sales.

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