Today's tweet storm is about business strategy at your startup.

If you think about building a company, it's a bit akin to one of those resource allocation board games. You know - like Catan or Tzolk'in or 7 Wonders -- stuff like that.

What is the strategy for your startup? >>

1) If you don't play resource allocation games, the general premise is that you try to amass resources (i.e. an audience), and then at some pt in the game you need to figure out how to turn those resources into victory points (i.e. monetization).

The same applies to startups.

2) In the most ideal world - infinite time and runway, the strategy is always focus on amassing resources. Then you can in one fell swoop monetize super easily all at once (more or less).

However, in both the game and real life you don't have infinite time and runway.

3) The opposite is also true. You wouldn't want to try to *only* focus on snagging just any points here and there in the beginning. This is most notable with companies like Twitter or Instagram -- consumer apps monetize only after you have TON of users.

4) So there's some happy medium depending on your runway and the specifics of your biz.

If you're in it for the long haul, the most ideal state IMO is to charge the min needed to stay afloat while maximizing your audience growth.

5) AMZN is a good example of this state. They constantly aim to break even. You don't want to go negative on your cost of goods (COGs) at scale, but they don't try to maximize profits. They play the long game & continue to focus on making their audience eager to keep coming back

6) But AMZN also raised a LOT of $$ & not every startup will be able to do that. @buffer is an example of a co that raised very little angel $$ that plays the long game really well.

@LeoWid wrote amazing content to amass a large audience & gave away a lot of product for free.

7) In 2012, Buffer was doing < $800k / yr in rev. 7 yrs later, they were $20m+. (rev up 20x in 7 yrs!)

There are TONs of examples like this, where the founders just "stayed afloat" and stayed super lean for the first few yrs, but kept amassing an audience.

8) Note: there's still a key metric even though revenue isn't that. Some sort of audience metric -- free users, newsletter subscribers, whatever.

The audience has to be REAL & has to be ENGAGED & has to LOVE you.

If that isn't the case, you don't really have an audience.

9) Lastly, once you have that loyal audience, that's when things are really interesting -- you can monetize / upsell really well.

I often wish startups started building their audience BEFORE they build and certainly before they pitch.

That's the most ideal.