Michael Arrington of TechCrunch remarks on Twitter’s dilemma for starting its revenue model. To reword his points:
- Many firms are acquired pre-revenue and thus their valuation is made without proof of its revenue model.
- Before a startup has a revenue model, its revenues are anyone’s guess.
- Once a firm has revenues, the range of guesses will be much narrower — and often lower than the most optimistic predictions.
Cross-posted to Engineering Entrepreneurship.