Build a great product first.
A product that adds value, solve a customer pain and is accessible and affordable.
Focus on making it simple to use.
Don’t compromise on your product.
When Jobs returned from Pixar, he shifted Apple’s focus back to making innovative products: the iMac, and then the iPod, the iPhone, the iTunes, and the iPad.
As he explained:
“My passion has been to build an enduring company where people were motivated to make great products. Everything else was secondary. Sure, it was great to make a profit, because that was what allowed you to make great products. But the products, not the profits, were the motivation. Sculley flipped these priorities to where the goal was to make money. It’s a subtle difference, but it ends up meaning everything—the people you hire, who gets promoted, what you discuss in meetings.”
Once you have a great product, then you can focus on how profitable the product should be.
You are not going to be in business long if you products are not profitable.
Know your numbers. If you don’t know your numbers, you don’t know your business.
Calculate your variable and fixed costs and workout your break even point.
Once you have a break-even point, then scale your sales volume towards exceeding your break-even target.
That way you will be profitable.
Like Steve Jobs says, profits will enable you to continue marking great products. No profits, no business, no great products.
Closely linked to profit is cash flow.
Keep a hawkish eye on your cash flow. Cash flow is the lifeblood of your business.
Revenue is vanity, profit is sanity, cash is king.
Don’t obsess too much about how much millions you made in turnover, the important question is how much cash you have after paying all your obligations.
Cash flow keeps you in the game.
Businesses get bankrupted not because they don’t have enough revenue, but because they don’t have enough cash to cover all their obligations as and when they become due.
Don’t be afraid of your business numbers. Numbers are your friends.
So build a great product, ensure it is profitable, and then scale, tightly manage cash flow, work towards break-even point and then build another great product and repeat the process.