There’s a great post by Fred Wilson, a New York-based VC, who writes about internet business models. He says the obsession with revenue isn’t the only – or even the best – way for internet start ups to build success. Focussing on costs can be more rewarding, since valuations are based on future profit streams. He cites Craig’s List as a great case of lean business with great margins – perhaps $100m of revenue and only 30 employees. The risk always is that firms become tempted to grow ever larger and this is what causes the real problems.

Technorati Tags: business models , internet