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by zamadatix 621 days ago
A sound business should have solid inertia to still create value to people for quite a while when an individual takes a short break from putting in 100% (voluntarily or not). A business which immediately become unprofitable the second you stop working is, like the author describes, acting more like a contract job than a healthy business (especially if it's only at 500k of revenue in that time with a small team of people - not much buffer to be made out of that revenue regardless of the margin).

Usually the main goal is to create value doing something you like to do. Of course there are far more than one bad or one good thing to do with a business so that doesn't exclude other things from being on either side of the scale.

1 comments

Does inertia matter? Or is it just another way of saying that the revenue is low?

I'd rather have X in my pocket instantly after creating the value rather than have half instantly and get the rest as an inertial trickle over the next year.

If you can make the assumption the total amounts will be equal then sure, better to just want it no and pocket it for later. Almost always they won't be equal though, even if you can convince everyone to buy immediately (which is a feat in itself).

More likely you'll reach some percentage of your target market in your first month while some other percentage still won't have heard of you or won't have the interest/money/time (depending what you sell) at that exact moment (and for them it's the opposite - better to wait until they expect to use it than buy early). In a year there might be a significant new group to sell to (say you're selling intro to python material and now you've got a new years worth of people to sell to).

None of that really matters if nobody buys your content after 6 months. You get those initial ones and you're done. It's a tough environment to build a business in because you can't just flick a switch that says "anyone who can possibly want to buy my stuff will do so this week", you have to battle to get as many as you can before it dies out and you need the new thing (or at least an updated thing).

Assuming that the amount of value you create corresponds to the amount of money you are rewarded with - within the same market, then it's just about revenue.

In your examples, you open up new markets, and doing that changes the other side of the equation: you need more work to get that extra income later.

In the end, that example changes all three: the amount of work, the amount of reward, and the time distribution, so I don't think it really shows that inertia is so common.