Hi @aggroed
I greatly enjoyed this post. It was long, but well written and an easy read. I think you hit the nail on the head with regards to business success. I like to think it’s like options trading, know the rules and follow them, deviate and be prepared to lose money. I think that knowing your costs and monitoring your cash burn rate are very important. I have been a partner in a few ventures and soloed a few more. I find estimating revenues is tricky, so I get help and always go with the lowest realistic estimates and with costs I go with the highest just to be safe. This has never let me down. Whenever I took the higher revenue estimates the cash burn rate led to the need to make cost corrections in terms of staff, which is demoralizing and can be a prelude to failure. But it doesn’t have to be if you correct your course are open and explain why the remaining positions are safe.
I especially like the part about charging a fair price and being paid enough to stay in business. I always say that people don’t value free stuff even if it’s valuable. You need to charge enough to stay in business and make people know your work or product is valuable. If your giving it away, why should they want it?
In regards to Steemit, I was very sad about people being laid off right before the holidays, my prayers are with them and I hope they had assistance with new employment. I am however glad to hear of the focus on lowering costs and focusing on revenue like Ads. I am also encouraged that people with large amounts of Steem have become more active on the platform and vocal about making suggestions to turn things around. I hope they consider hiring a turnaround specialist to take a look at things, he/she may have an open objective mind about all the solutions proposed by the community.
Take care,
@shortsegments
@shortsegments "find estimating revenues is tricky, so I get help and always go with the lowest realistic estimates and with costs I go with the highest just to be safe. "
So you should always have a buffer zone to stay comfortable.
I agree that a buffer between the estimated costs and estimated revenue is essential. By choosing the lowest profit estimate I hope actual profits will be higher creating a buffer. But I understand that building a buffer in the beginning is safer. Thank you.