The size of your dreams: or charging for your products

David Heinemeier Hansson gave a talk at Paul Graham's startup school on April 19th. David is the creator of Ruby on rails and parter at 37signals.

WHAT: David's main point is that startups need to have a clear business model and not just look for an exit strategy. Using examples from the real world he concluded that its always a better strategy to charge for your product, even if that means having less customers.

Why is it a better strategy? Because the odds of recruiting 2000 customers who pay, say, $40 a month are much better than creating the next youtube. So its more doable.

SO WHAT: Although controversial in the mindst of this startup frenzy, David's points should hit home and make most entrepreneurs think twice about their vision and strategy. I guess the typical argument against this is "we should dream big or go home". Creating "just another" small internet business is obviously not sexy enough in a world of googles and facebooks.

But to David's point, if you find a good nich and a purpose in your life, you can really be successful AND happy. Its about getting to a point where you earn enough to call your own shots.

Maybe then you can also experiment with other products and ideas. But getting there is the first step.