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Start up CEO's tend to focus in their reports on beating revenue targets (if that's the available positive spin) or highlight beating the expense line (clear second place in the positive spin department). It is understandable enough, after all, you put the available good news forward. Sure, it is usually better to be the "beat revenue" story rather than the "beat expenses" story. And, of course, one would always like to tell the both "beat revenue and expense" target story. But that isn't always possible. Then again, how one achieves higher revenues or lower expenses determines whether either the results are good news or bad news. Because either can be good or bad news.
That said, I find that both reports in practice tend to under report the "how" they beat revenues or expenses. As the listener, the how one exceeds revenue or beats expense targets is key. For the qualitative appraisal of a board director of these reports, the how is the focal point. In fact, the "how" may be the most important aspect to the report. The how of current achievements is the window to and foundation of future performance.
First, let's level set our understanding.
It is an American maxim and tired joke about one spouse remarking to the other over an armful full of purchases --- "I saved you money as these items were 'on sale' today". Of course, the non-shopping spouse sees the half empty side of the class that money wasn't "saved" but rather "spent" on the sale items. Either way, across varying time lines, both sides of the argument can be viewed as fundamentally correct. This commonsensical view of getting necessary things cheaper via promotional sales is difficult to oppose for most people.
It does have limits as an argument, however, within a business context. Because in business, now is qualitatively better than later. Now is better than later in business because the early an investment is made the sooner it pays off. In smaller or start ups, this early is better can be especially true as small companies are always in a race against time.
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If one, for example, beats expense targets by delays of hiring (which is commonly the case) this has all kinds of downstream effects. Or by same token, keeps marketing spend lower to create a better present and an undermined future. And there is no delay in hiring that will be felt as directly as a failure to hire sales people. If, for example, a salesperson takes 4 months to become a positive contribution to operations, then delays in hiring salespeople create a hole in time and money that can't be filled. That time and money is lost. Like an airplane flight with empty seats, the revenue opportunity is lost. And there is no chance to get it back. It is quite a repeated, though frustrating, moment to hear a CEO imitating success via lower expenses built on the foundation of reduced marketing or understaffed sales. "Great", I think, "we missed revenue and we will keep missing it". But, I get to hear about how we staying under our expense targets. It is not small consolation, it isn't consolation at all.
By the same token, hitting the current revenue target by emptying the next quarter or heavy discounts isn't a victory. Weakening the future or customer price expectations will cost the company and quickly. To hit a revenue target while greatly exceeding expenses has its clear drawbacks as well.
The net of all of this is today's results don't stand alone. They must represent current achievement but also a clear path to future results. In a start up, where the future holds greater prospects of the company's potential --- today's results are more about the future than the present. Everything done today is building a better tomorrow. If exceeding revenue builds a better tomorrow or exceeding expenses contributes more to a better eventual outcome, pursue the latter.