I just had an epiphany of sorts…

With regards to the financials of your startup, there are only two things that really matters: money that comes into your company & the money that goes out. There’s no need to waste time & energy in an in-depth analysis of your finances (most of the time), as it is really simple to track these two metrics.**

So optimizing your company would mean that you spend as little money as possible to continue generating as much revenue as possible. Simple.

** I’m a fully qualified management accountant.

I recently stumbled onto the Second Startup Syndrome article by Ben Horowitz and whilst reading it I realized that I was going through exactly the same thought processes, emotions & ideas as was described in the article.

Since the beginning of the year, I’ve been working on getting my original company - radiiate - out of hibernation, since I didn’t want the brand or the initial TLC that went into the company go to waste. My biggest problem though has been to find the time to devote to what can essentially be called a startup all over again, as WooThemes was still taking up the majority of my time, whilst The Rockstar Foundation was also beginning to demand more and more of my mental energy & ideas.

So during the last 6 months I have taken shortcuts. I didn’t trust the same, bootstrapping advice & strategies that I blog about here and didn’t apply the same thinking as we did when building WooThemes so successfully.

In fact, this only recently changed when I came to the realization that I needed to be less idealistic about what I wanted for the company and almost needed to go back to square one if we wanted it to succeed.

The 6 months also didn’t get wasted, because as a team we learned a hell of a lot during this time and if we only learned one thing, it’s that there are models & ideals that we definitely won’t be exploring in future… :)

After reading this article about Airbnb’s success, there was one bit from the article that really got me thinking:

“…a company that creates immensely more value than it extracts from customers…”

Reading & re-reading that phrase really got me thinking about how other business models work in terms of the margin between value created & value extracted.

I’ve not read Tony Hsieh’s Delivery Happiness yet either, but I kinda suspect that it’s gonna come down to the same principle: create & offer more value than you are necessarily being paid.

This doesn’t mean you should cut profit margins or stop earning a profit all-together, but you should consider adding non-financial value to whatever it is you are offering clients. So how can you do that in your business?

Enjoyed this post, as it describes closely how I see myself as well in terms of loving startup life so much that I’m keen to do new, cool stuff going forward. For now though, I’m ecstatic at the journey that WooThemes is affording me! :)

For how many of you is this quote true?