It’s About Making Money Stupid

Do your business endeavors make money? Will they ever make money without being purchased by someone else? If the answer was no to both of those questions, you’re running a large expensive hobby instead of a business. There’s been a lot of noise made on the internet bout how companies are going to have to hunker down until the economy is done taking a dump the size of an economic bailout package. In the meantime, they’re firing people and streamlining their business to operate for as little money as possible. They are also, perish the thought, thinking about how to make money.

Last week, Venture Beat posted The Sequoia “RIP: Good Times” presentation: Here it is. Slide 46 includes the following phrases under “SURVIVAL”

  1. Established Revenue Model
  2. Need for Profitability

These weren’t the only two points, but they’re the important ones.

This presentation was created to re-educate Sequoia invested companies about today’s market and economy. Are these two goals new to the playing internet playing field? I am pretty sure that people started to wake up after eBay bought Skype for $2.6 billion or when Google bought YouTube for $1.65 billion and couldn’t figure out how to make money with them. PodTech took $7.5 million and turned it into a $500k sale. Earlier this year Revver sold itself for $5 million, about $7.7 million less than the total amount of funding it received.

The days of building a company to be acquired are over, and it was stupid to ever rely on that to begin with. Make money stupid. It’s how you stay in business.