I'm guilty of having made comments like this before, and I just saw another one today:

When we launched XYZ we started day 1 with a profitable, monetizable business model.

Profitability is not making $200/month, enough to cover your hosting costs. While generating revenue is exciting, you are not profitable if you are not getting paid a financially sustainable amount of money for your time. Here's a good definition of profitability from Investopedia:

What Does Profit Mean? A financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs and taxes needed to sustain the activity.

The ultimate purpose of any business is to generate revenue, and having a business model is much more necessary today than it was two years ago -- so bringing in any kind of revenue is exciting, and a notable accomplishment.

But saying that the business is profitable without accounting for the cost of your time is a bit of an amateur mistake, one I've made several times in the past.

 


Comments

Jerome

Sun, 18 Jan 2009 6:44:13 am

wow. that was an annoying piece of spam right above. I do hope that you guys do well in the future. You guys got something good in your hands. I would be wondering though that with all the work you have to do, is there still lots of time for you to learn and try new things in comparison to when you weren't as busy?

 

carlington

Wed, 21 Jan 2009 10:40:34 pm

That picture effect at the top of your page is really cool. If there is a quick way to pass on the know how, please do tell. Great blog by the by.

 

Susan

Sat, 31 Jan 2009 11:41:00 am

okay - I'm hooked - how did you get your header image to move with the curser like that? or am I such a newby at this that everyone else already knows? thanks for a great (and improving) product

 

Eric Wan

Thu, 19 Feb 2009 10:07:13 pm

Good one, you are only truly economic profitable if the money you made is more than what you'd have earned if you go for a day job.

 

Comments are closed.