Why we shut down a product that was $75,000/year profitable
After reading the article I have to question whether it really was profitable.  I think one of the mistakes that coders (and most business owners) make is to value a profit solely on the accounting values:  (income from the application) - (direct expenses of the application).<p>However, the true way to value profitability is to take a more financial perspective (financial being different than accounting).  A financial perspective would value the opportunity cost of working on this application compared to working on another application.  If the team spent 10 hours a week on the application, and those 10 hours a week could grow their other products by more than $75,000 a year, then of course the application isn't profitable.  It's actually losing money.<p>Another way to look at its profitability is to look at it from an operational standpoint.  The employees on the team would be consider a fixed cost (yes, they could hire more people, but that just changes the fixed cost).  The limited resource for this particular fixed cost is time, and from their article I can assume that their time was maximized (working as many hours a week as they wanted to). Operational theory says when a fixed cost is at its maximum utilization, higher marginal profitability items should be prioritized.  Basically, they are better off working on other items if they don't want to work more hours.