Early On, It’s Not All About Revenue

Revenue is an important business metric. But for early-stage companies that haven’t achieved product–market fit, gauging success only by revenue can be misleading. It’s nice to see revenue growing in the early days, but it’s even better to see signs that your customers are getting value from your solution.

Companies that focus exclusively on revenue can become myopic about closing a deal. Their primary goal should be to create value for customers by solving their problem superbly. If you nail it, revenue will grow. Early on, metrics that show how much customers are using your platform or how often they’re coming back are more telling than revenue. A paying customer who uses your platform monthly is somewhat engaged, but may not be receiving much value from it. A paying customer who uses it every day is likely receiving tremendous value from it. The former may not stay with you because the platform doesn’t solve their problem well enough. Revenue may look good in the short term but mask a serious long-term problem.

If you’re an early-stage founder, keep an eye on revenue, sure, but keep a closer eye on product–market fit. If you build it (better than anyone else does), they will come (and keep coming).