AKF Partners

Abbott, Keeven & Fisher PartnersPartners In Hyper Growth

There Is No Substitute for Profitability

General Douglas MacArthur was a quote machine. One of my favorite is “War’s very object is victory, not prolonged indecision. In war there is no substitute for victory.” What’s true in war is true in business. Swap “war” with “business” and “victory” with profitability and you have a statement we all should heed: ““Business’s very object is profitability, not prolonged indecision. In business there is no substitute for profitability.”

Why do we keep forgetting this? What’s wrong with us that we continue to focus on businesses metrics such as unique or concurrent users and growth in both? None of these matter if they don’t directly relate to profitability. Don’t fool yourself folks – don’t think that getting the “traction” of users is the hardest part of the business. Don’t think that you’ll just layer on advertising later and have a profitable business.

If you aren’t building in profitability from day 1 you are creating a cash incinerator. The folks at Google are still trying to figure out how to make YouTube profitable. Great idea? Maybe…if it ever becomes profitable. Anyone can build something to burn cash. After all, it’s just a free hosting environment for videos. Going to business without a plan for profitability is like going to war without a strategy to win. The only difference is that you’ll burn cash rather than lives.

Comments RSS TrackBack 2 comments

  • Geoffkev

    in February 11th, 2009 @ 04:25

    Interesting and informative information. Good to know.

    I just wanted to share some piece of information which I came across while I was looking to expand and scale up my business. There is this business profitability and scalability calculator which is there on this site Seo Traffic Spider and its really cool. When you enter the data in it in terms of the amount and time you are spending on promoting your website, it calculates the total resources in terms of cost you are accruing for your website promotion.

    The best I like about it is that after calculating the result, it gives you a customized less expensive solution based on your data and its really interesting. You can try out this tool and see the results for yourself.

  • Abbott, Keeven, Fisher &#038 Fortuna Partners

    in March 17th, 2009 @ 20:57

    […] product and then figuring out how to monetize it has been largely debunked.”  We agree that There Is No Substitute For Profitability.  The article continues, stating “People who sign up for free services tend to resent a […]