I’ve worked in successful startups and not so successful startups; established companies that make hundreds of millions in profit and some that make hundreds of thousands. What draws me most to a particular company or position is the opportunity to innovate. At one company that was my specific job – create new products. Over those years I’ve learned a thing or two about innovation, like you don’t join a startup to innovate. That’s for two reasons. First, most of the innovation was already done by the founders. They already had the idea, the spark and are now just trying to execute. To build their idea into a product. The second reason is that startups traditionally don’t care about profit. Profit is something to worry about after the IPO or sale to Google.
Think profit isn’t important to startups, just read the recent post on 37Signals blog – The bar for success in our industry is too low. Or watch this video from Watch David Heinemeier Hansson.
Startups keep a close eye on their burn rate, but have seemed to have lost track of classic business principles. The drive for profit not only keeps the lights on but adds structure to the innovation process. In startups I found the senior team was open to innovation as long as it was along the lines they were already thinking. They didn’t care to test much because they already knew. It isn’t that different in an established company but you have something in your back pocket – profit. Demonstrate that your idea can bring in a massive profit and they’ll listen a little more. They also tend to listen with a more open mind, they don’t feel like their job is to execute but to manage. They can also be incredibly risk averse, but startups can too despite the image.
If you’re still not convinced of the importance of profit I suggest checking out the Lean Startup from Eric Ries. He’s a big supporter of charging for a product from day one. And just remember, profit not only keeps your business alive but instills discipline, especially in the innovation process.
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A Senior Product Manager at 