I can agree with you on 90% of this. But honestly profit isn't only measured in numbers on a screen. Some profit is accomplishing a certain goal not just adding another dollar in your pocket. In fact if your in business just to earn a buck your doing it wrong. The best business in the world solve a problem and that solution is the profit. While you do need to build a monetarily sustainable business if you look at the business that failed its because all they cared about was a quick buck. If you look at the business that succeed its because they solved a problem and that solution was valuable enough for people to spend a few bucks.

"My primary word of caution though is you have to figure out how to charge for a service that people want. I don't think it's a real business to have a stake and dole out rewards. As you can see that isn't a sustainable model especially when the prices go up and down. You need to have a service or product, collect revenue from that, and make sure you're spending less money than what's coming in." That just gave caution against what made facebook so successful at the beginning why not try it again? They made something that people liked and got users on board and only then did they think about how that was going to make them money

If your charging steem dollars for your product or service it is no different of a business model than owning a stake and doling out rewards as you are just as susceptible to the ups and downs of the market as if you owned a stake. Lets say you order 1000 t-shirts and pay 5 usd each and turn around to sell them for 15 sbd but then sbd crashes far below the value of 5 usd you will be losing money. Basically no difference between selling or putting up a stake. All business are subject to the volatility of the steem price.

The creators of bitcoin saw how much profit there was in the freedom from centralized money so that was added into to the profit margin. So with only owning stakes they have solved a problem that the solution is now so valuable that their stake is worth money. This is why bitcoin is so successful because Their first goal was solving a problem and with out that even if your business gets up and running it will not be sustainable in the long run as it will just be a fad.

Lets use steemmonsters as an example: It solves several problems for the gaming community 1) it guarantees the authenticity of a card. 2) it puts that collectible card on the block-chain 3) It provides entertainment on a platform where people come seeking entertainment.

Lets say it cost you 1/4 of the price you charge to create one card. and lets say the price of steem stayed at 1 usd when you sold 100,000 steemmonsters. Then all of a sudden steem goes down to 0.25 usd well you have lost all your past profits as that barely recoups your cost. That's the risk your taking for possible gains in the steem token.

Now if you have a stake in an app(steempower) and only dole out rewards. your stake will earn you rewards from the beginning while not actually costing you any money, as doling out a reward cost you $0
So lets compare that to your definition of profit "Profit is a derivative of two other things: revenue and expenses." If your cost are zero because your revenue is rewards than you have a 100% profit margin therefore making it a success from day one even if the business fails as you have made a profit. not to mention that as long as you spend less than your rewards you will be able to survive the ups and downs of the steem price and have a stable platform to work from.

Other than that I agree with your thoughts on the charge fairly, keep expenses down, minimum viable product and not losing faith.

Oh and in my opinion the number one thing that matters in a successful business is the top management. If you don't have a good management team then nothing else will help it become successful. Good ideas fail from poor management and horrible ideas work because of good management

If you read this all sorry for my long rant. I just have a lot of passion on this subject. I do have respect for you aggroed so I hope you are having an awesome holiday season with the whole baby thing! that is always exciting