Revenue vs. profit: What’s the difference and why does it matter?

The text discusses the concepts of revenue and profit in the context of business strategy, emphasizing that while revenue is the total income generated, profit is what's left after costs are covered, and the two do not always correlate directly. It explains that businesses, especially in their growth phase, may prioritize revenue to gain market share, even if profits are minimal, as this can attract investor support. The text outlines various business models such as subscription, freemium, SaaS, on-demand, and marketplace, highlighting that each has different implications for balancing revenue and profit. It stresses the importance of understanding customer acquisition cost and lifetime value to assess business sustainability. Tips for maximizing revenue and profit include focusing on high-performing products, eliminating underperformers, encouraging customer commitment, and leveraging partnerships to reduce costs. The text concludes by emphasizing the need to view revenue and profit in the broader context of overall business strategy and customer relationships, cautioning against a narrow focus on financial metrics alone.