223: Revenue is a vanity metric

Oh wow, that guy has such a big business! - That is what I used to think when people posted their revenue numbers.

As a reader, your mind fantasizes about that number, and in many cases, you legitimately think that they are making that much income...

But that's not the case at all.
Because revenue is a bullshit vanity metric.

As an example of this, Lead Cookie is doing roughly $55k in monthly revenue, yet our margin is really closer to 15-20%. We have a big team and a lot of costs.

So while I can boast revenue numbers all day, I'm not rolling in cash over here. I have a great business, but it's probably not putting off the fantasy cash that most people dream up in their head.

Counter that with a friend of mine who has a software business. They have 3 team members and ~$55k in monthly recurring revenue...

While I don't know my friends exact margin, our conversations made it very clear that he was pulling in far more profits than Lead Cookie.

So when people boast their revenue, look at it for what it is.

They may have $1M in revenue but $950k in costs to get there.

Revenue is vanity
Profit is what counts.