This is Signal vs. Noise, a weblog by 37signals about design, business, experience, simplicity, the web, culture, and more. Established 1999 in Chicago. Follow us on Twitter for more information on our products.

Clayton Christensen is a genius. My favorite podcast of all time (anyone anywhere anytime) is his IT Conversations presentation on ‘Capturing the Upside.’ Give it 3 or 4 times for it to really sink in… http://itc.conversationsnetwork.org/shows/detail135.html

Doesn’t make much sense… are you supposed to push for profits fast and give up if you don’t see them right away? What happened to slow and steady wins the race?

@Richard: Where do you see “give up” in Clayton’s statement?

Or I would say profit is sanity and sales are vanity

It means the exact opposite of the internet boom era. It means value profitability over size. It means don’t waste money.

It’s spot on. Valuing profitability right from the start will force you to focus on how much value you you’re providing for the consumer. Giving the consumer true value leads to profits.

Brilliant quote. Large numbers do not equal being highly profitable. A large percentage of profit relative to revenues is what makes you highly profitable. If you can’t sort that out on a small scale first, you’re in trouble if you ever manage to get large. In fact, becoming large will likely only serve as a stumbling block that you will never overcome.

Just because you can grow doesn’t mean you should. Some value their time and freedom over more and more growth and money. Growth usually means larger problems and larger headaches, more time sacrificed, and on and on…all the things you want to avoid in running your own business. After all, don’t people want to run a business so that they may control their time and destiny? I am reminded of two great quotes that seem to (at least indirectly) address this topic:

1. An entrepreneur (there’s that dreaded term again!) is someone who wants to avoid the 9 to 5 world so that he can work 16-hour days.

2. This mess is so big and so deep and so tall, we cannot pick it up, there is no way at all. —Dr. Seuss.

It is definitely true, a business venture should be impatient for profit and productivity, and patient to grow step-by-step.

I am not sure about the quote as David put it. The one from the HBR article is more telling : “businesses should become profitable before they become big. The best way to manage a fledgling business is for managers to be impatient for profit but patient for growth”.

Applied to the Groupon case : “Groupon maintains a blind faith that growth will be its salvation. As Pets.com learned in the last bubble, such a strategy works just fine until you run out of other people’s money to spend on growth.”

patiently waiting for profit then….