In the recent Stephen Colbert interview of Biz Stone (co-founder of Twitter), Biz contrasts building “value” and building “profit”. It’s something that’s been on my mind lately, too. Here are my simple definitions:

  • Value: Customers would miss you when you’re gone
  • Profit: Customers are willing to pay you to make sure you won’t be missed

I think Twitter’s approach is right on, building the value first. Biz claims to have “patient investors”, and I think this is critical to making this approach work. I’d like to think that at Ringside Networks, we built value (based on the number of downloads of the open source platform we built) and the interest in the platform that resulted. We were far from producing profit when we folded, but I still have confidence in the formula.