Episode 770 | Revenue vs. Profit, Asking for Permission, and Mike Tyson (A Rob Solo Adventure)
Episode
25 min
Read time
2 min
Topics
Startups, Leadership, Design & UX
AI-Generated Summary
Key Takeaways
- ✓Revenue Transparency: SaaS companies traditionally have 5-7% cost of goods sold versus ecommerce at 50-70%, making revenue comparisons misleading. Sharing expenses alongside MRR provides complete picture, though most founders cherry-pick impressive top-line numbers for marketing purposes.
- ✓Defeatist Mindset: Aspiring entrepreneurs who find excuses why ideas won't work before trying rarely succeed. Surround yourself with people who ship products and turn roadblocks into speed bumps. If you lack local connections, follow successful founders online who demonstrate execution.
- ✓Vision Beyond Technology: George Lucas started Industrial Light and Magic and designed THX sound because existing technology couldn't match his vision. When your taste exceeds available tools, build new solutions rather than accepting constraints of current technology stacks or platforms.
- ✓Entrepreneurship Accessibility: Unlike becoming heavyweight champion or Olympic athlete, startup success doesn't require being world-class. Thousands of founders build life-changing businesses to 10k-500k monthly revenue without perfect genetics, timing, or being best in world at single skill.
What It Covers
Rob Walling addresses revenue versus profit transparency, the danger of defeatist thinking in entrepreneurship, developing taste that exceeds current technology, and why startup success doesn't require being world-class like professional athletes.
Key Questions Answered
- •Revenue Transparency: SaaS companies traditionally have 5-7% cost of goods sold versus ecommerce at 50-70%, making revenue comparisons misleading. Sharing expenses alongside MRR provides complete picture, though most founders cherry-pick impressive top-line numbers for marketing purposes.
- •Defeatist Mindset: Aspiring entrepreneurs who find excuses why ideas won't work before trying rarely succeed. Surround yourself with people who ship products and turn roadblocks into speed bumps. If you lack local connections, follow successful founders online who demonstrate execution.
- •Vision Beyond Technology: George Lucas started Industrial Light and Magic and designed THX sound because existing technology couldn't match his vision. When your taste exceeds available tools, build new solutions rather than accepting constraints of current technology stacks or platforms.
- •Entrepreneurship Accessibility: Unlike becoming heavyweight champion or Olympic athlete, startup success doesn't require being world-class. Thousands of founders build life-changing businesses to 10k-500k monthly revenue without perfect genetics, timing, or being best in world at single skill.
Notable Moment
Rob recalls a film school graduate who refused to pursue directing after one failed attempt, claiming assistant directors never advance and inventing reasons every suggested path wouldn't work, exemplifying the defeated mindset that prevents entrepreneurial success.
Episode Transcript
You're listening to this, you're an aspiring entrepreneur, don't do that. Hang around with people who get done. Hang around with people who ship. Hang around with people who say it can be done. And if you don't know any, then find them on the Internet. Listen to this podcast. Read the books from people who are getting it done. Welcome back to another episode of Startups with the Rest of Us. I'm your host, Rob Wallen. And in this episode, I have a handful of solo topics. One of which is a question I received on x Twitter about quoting revenue versus profit. Then I have a topic about giving up before you should, finding excuses why things can't work, then one about having taste and what you might have to do to achieve that taste, and potentially another topic or two depending on timing. Before I dive in to the meat of the episode, MicroConf Growth Retreat in London is one month away. It will sell out. We've sold all our events out for the past couple years. If you are in London or can get to London, May 14 through the 2025 for this small intimate event that's gonna foster deeper conversations. It's gonna be about 40 to 60 bootstrapped and mostly bootstrapped founders. You should head to microconf.com/retreat and buy a ticket. It's gonna consist of morning work sessions, afternoon excursions, and all day hanging out with a bunch of motivated bootstrapped and mostly bootstrapped founders. That's microcomp.com/retreat. In addition, I wanted to mention the m and a brokerage that I recommend for folks doing 2 to 20,000,000 in ARR, SaaS companies in particular. It's discretion capital. That's discretioncapital.com. You've heard the founder and principal of discretion capital on this very show, Einar Volset, my cofounder with tiny seed heads up discretion capital. So if you are considering selling and frankly, if you're north of a million ARR and you're thinking, hey. I wanna sell when I get to 2,000,000 or more, that's when you should reach out. Einar at discretion capital dot com or you can head to discretioncapital.com. They've had incredible exits. They only do the sell side of m and a advisory. So they don't help buyers find you. They support founders as they go through their exit. And with that, let's dive into my first topic of the day. This is a conversation on x Twitter where it starts with a tweet from Stefano Monteduro, and he says everyone's talking about MRR and ARR. But what's the point of sharing those numbers if costs aren't even considered? You can hit 20 k MRR with $10,000 in expenses or 12,000 MRR with just 1,000. Am I the only one who finds this weird? And Nagosh Deb says, I would love for Rob Walling to address this. I know it would be epic. I'm not sure it's gonna be epic, but I at least like to weigh in on this. So I've bristled at …
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“George Lucas started Industrial Light and Magic and designed THX sound because existing technology couldn't match his vision.”
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