Short discussion (May 11, 2018) by Jason M. Lemkin emphasizing that startups should prioritize delivering clear customer value and ensuring active product engagement (including both sides of a marketplace) because focusing prematurely on revenue can drive short-term, counterproductive behavior; value and engagement drive long-term revenue growth.
The more you focus on revenue, the worse off you will be. And what you should focus on first is value and engagement. Really deeply understand the value that you're providing to your customers. Make sure that you are clear on what that is. Make sure it's super compelling to your customers, measure it and get better and better at doing that. And then on the engagement side, make sure that people are actively using your product and make sure that kind of every constituent, if you're in a marketplace, make sure you've got both sides using your product or service. So value and active engagement and then revenue will come.
Interesting. So then sort of the paradox of overly focusing on revenue first can drive wrong behavior as opposed to usage and retention will take you on the journey that you can then monetize.
If you just focus on the revenue side, you can end up in kind of a hamster wheel situation where you're just trying to do everything to kind of squeeze a little bit more water out of whatever situation you're in versus actually focusing on the long term growth driver which is around value.
