Value vs Revenue for startups

Yesterday, we were having a discussion on a possible kiva-like play in India which will help connect two very disparate but mutually enriching communities and what kept us puzzled was inspite of the value being created, the revenue-generating mechanism for us was nowhere in sight. Taking any sizeable cut from either of the connecting communities would diminish the value being generated; however, without revenue mechanism there was no way we could keep surviving.

My intuition was to pursue the idea deeper mainly because:
1. It has the scope to generate immense value.
2. Can alter the dynamics of the current system, from marginal to a major extent.

Which bring us to this post…
1. Should startup entrepreneurs pursue an idea even if doesnt have a revenue generating idea now itself but creates value?
2. Occupies a niche field in an area where there is a lot left to be done and can help remove the pain points of customers.

My `opinion` is definitely a yes. Creating value creates fills a dichotomy: people who need it and people who benefit by filling up that need. Generally, a startup is expected to be the latter. However there are cases where the essential dichotomy exists between two subgroups in the former; i.e the role of a facilitator who takes care of bridging the gap between two people who need each other; but there is no way of getting to one another in the best way possible.

Google stands out as a best example of this gunning for value philosophy. They didnt have a business plan until they were about 2002. They had created an essential value of being able to bring search to unstructured data.

For all I know, if a product startup is not creating immense value, it will meet either of two fates, either getting trounced heavily by another player who does create value or will just go bankrupt.

Would love to hear your views on if value is the way to go for a startup (rest assumed that the ways for surviving till they have a business plan is chalked out). I will tackle the ways of value creation of a startup in my next essay ‘Big Guy vs Small Guy’.

2 Thoughts to “Value vs Revenue for startups

  1. Hey forum!

    It’s my first time I am here.

    So i’d like to ask you if a world financial crisis affected someone among you?

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