Startup Professionals Musings

AUGUST 13, 2022

Wessel also summarizes the costs and potential impacts of creating and building your startup in secondary markets, usually meaning not in Silicon Valley or one of the other super-hubs: It takes longer to raise money. Wessel measures a 39% acquisition advantage to being in-state. It’s very important.

Las Vegas 309

Las Vegas Silicon Valley Arizona Montana 309

Startup Professionals Musings

JANUARY 24, 2021

Sales and distribution channel activity will be analyzed, as well as cost of customer acquisition, to make an independent assessment of your financial projections. A smart investor will take an independent final reading in the market on barriers to entry, active competition, demographics, and price sensitivity.

Technical Review 379

Technical Review Due Diligence Term Sheet Bankruptcy 379

Startup Professionals Musings

DECEMBER 17, 2013

Sales is simply defined as income from customer purchases of goods and services, minus the cost associated with things like returned or undeliverable merchandise. Sales data needs to be correlated to advertising campaigns, price changes, seasonal forces, competitive actions, and other costs of sales. Cost of customer acquisition.

Metrics 252

Metrics Technical Review Retention Acquisition 252

Startup Professionals Musings

JULY 1, 2020

You will never seem to have the time, skills, or resources you need for that key acquisition, global expansion, or new product offering. There is no way to predict where and how this will occur, but it should help to realize that it does happen, and you should not assume you are the cause.

Due Diligence 306

Due Diligence Entrepreneur Startup Acquisition 306

Startup Professionals Musings

JULY 28, 2017

In the heat of scaling the business, it’s tempting to skip the cost and time of finding qualified job candidates, and enlist those close at hand, without paying them a competitive wage for the hard work and commitment you need. Things cost more than you expect, and cash-flow problems often are not recoverable.

Cost 180

Cost Advisory Board Entrepreneur Angel Investor 180

Startup Professionals Musings

NOVEMBER 9, 2019

Wessel also summarizes the costs and potential impacts of creating and building your startup in secondary markets, usually meaning not in Silicon Valley or one of the other super-hubs: It takes longer to raise money. Wessel measures a 39% acquisition advantage to being in-state. It’s very important.

Las Vegas 243

Las Vegas Silicon Valley Arizona Montana 243

Startup Professionals Musings

MAY 28, 2022

In addition, you need to focus on the unique value you bring, and maintaining the gap between what customers are willing to pay versus your best cost. Use acquisitions to complement organic growth. Smart companies use acquisitions to enhance momentum and accelerate revenue growth. In many cases, the return is not worth the cost.

Intellectual Property 322

Intellectual Property Acquisition Non-Compete Merger 322

Startup Professionals Musings

MAY 15, 2019

Don’t forget a viable financial model of costs, margins, customer acquisition, and break-even. For example, when you think about distribution channels, revenue streams, or the relationship with the customer, ask customers what they expect.

Startup 245

Startup Angel Investor Technical Review Incubator 245

Startup Professionals Musings

OCTOBER 8, 2022

Vendor costs are subject to change, customers are fickle, competitors come out of the woodwork and the economy can take a downturn. The manual calculations to translate market assumptions into costs, volumes, expenses and net return are massive. What if your customer acquisition cost assumptions have to change?

Conversion Ratio 368

Conversion Ratio Startup Business Model eCommerce 368

Startup Professionals Musings

APRIL 28, 2023

Beyond that, there may be a large percentage of common technology where they both need to minimize cost to gain share from the big dinosaurs who already have this advantage. A strategic evolution of your combined strengths may be able to open up a new segment that neither of you could do alone in the same timeframe or at the same cost.

Non-Compete 262

Non-Compete Intellectual Property Merger Acquisition 262

Startup Professionals Musings

JULY 26, 2010

Non-organic growth would include OEM relationships, finding strategic partners, “coopetition,” as well as acquisitions. Even mergers and acquisitions (M&A) came early. In many cases business opportunities with competitors (coopetition) will open up a new marketing channel, and definitely give you the cost advantages of scale.

Acquisition 214

Acquisition Merger Startup Bandwidth 214

Startup Professionals Musings

SEPTEMBER 14, 2022

A reverse merger is the acquisition of an already public company (usually a dormant shell) to avoid the Initial Public Offering (IPO) process and cost, to quickly get your startup on a public exchange for fund raising through visibility and selling stock. It takes real money to get into the game. Yet reverse mergers are not all bad.

Merger 261

Merger OTC IPO Due Diligence 261

Startup Professionals Musings

SEPTEMBER 27, 2023

Startup owners need to assume a three to five year wait for a liquidity event, such as acquisition or going public, before they can cash out. To retain control, the original founder must reserve the right of first refusal to buy shares back at cost from a partner who decides to leave early or stop working. In the U.S.,

Stock 240

Stock .Net Vesting Founder Vesting 240

Startup Professionals Musings

DECEMBER 17, 2022

Marketing costs and time go up, and the growth curve flattens. Customer acquisition gets harder and more expensive. Scrappy guerilla marketing based on personal contacts and word-of-mouth campaigns gives way to more expensive customer acquisition using advertising, trade shows, and a marketing agency.

Hockey Stick 265

Hockey Stick Guerilla Acquisition Startup 265

Startup Professionals Musings

APRIL 11, 2022

Every business needs revenue to provide investor returns and offset costs. Every entrepreneur needs to know and communicate the total costs associated with their solution or product, including cost of goods sold, customer acquisition costs, capital costs, operational expenses, and partner costs.

Business Model 334

Business Model Intellectual Property Angel Investor Channel 334

Startup Professionals Musings

OCTOBER 27, 2014

The good news is that a patent can scare off or at least delay competitors, and as a “rule of thumb” patents can add up to $1M to your startup valuation for investors or M&A exits (merger and acquisition). This hit RIM (Research In Motion) a few years ago, and cost them $650M to recover. Applying for a patent is a negotiation.

Software Review 250

Software Review Software Technical Review Intellectual Property 250

Startup Professionals Musings

JUNE 5, 2012

A strategic combination can win in a new segment of the market, which neither of you could do alone in the same timeframe or at the same cost. Cost sharing and economies of scale. Companies work together on segments of their business where they believe they can minimize costs but not jeopardize their unique attributes.

Non-Compete 241

Non-Compete Merger Technical Review Software Review 241

Startup Professionals Musings

FEBRUARY 6, 2022

Most founders and CEOs will not voluntarily establish a formal Board of Directors, unless they are trying to attract a major investor, preparing for an IPO, or planning for an acquisition. For Advisory Boards, I recommend three to five as max, to limit costs and time spent for support. How much are you willing to spend on your board?

Advisory Board 348

Advisory Board IPO Angel Investor Acquisition 348

Startup Professionals Musings

AUGUST 1, 2020

Beyond that, there may be a large percentage of common technology where they both need to minimize cost to gain share from the big dinosaurs who already have this advantage. A strategic evolution of your combined strengths may be able to open up a new segment that neither of you could do alone in the same timeframe or at the same cost.

Non-Compete 317

Non-Compete Intellectual Property Merger Acquisition 317

Startup Professionals Musings

DECEMBER 8, 2019

A reverse merger is the acquisition of an already public company (usually a dormant shell) to avoid the Initial Public Offering (IPO) process and cost, to quickly get your startup on a public exchange for fund raising through visibility and selling stock. It takes real money to get into the game. Yet reverse mergers are not all bad.

Merger 303

Merger OTC IPO Due Diligence 303

Startup Professionals Musings

JANUARY 18, 2014

Don’t forget a viable financial model of costs, margins, customer acquisition, and break-even. For example, when you think about distribution channels, revenue streams, or the relationship with the customer, ask customers what they expect.

Entrepreneur 283

Entrepreneur Startup Angel Investor Technical Review 283

Startup Professionals Musings

DECEMBER 2, 2017

Wessel also summarizes the costs and potential impacts of creating and building your startup in secondary markets, usually meaning not in Silicon Valley or one of the other super-hubs: It takes longer to raise money. Wessel measures a 39% acquisition advantage to being in-state. It’s very important.

Silicon Valley 149

Silicon Valley Las Vegas Arizona Montana 149

Startup Professionals Musings

MAY 12, 2017

Don’t forget a viable financial model of costs, margins, customer acquisition, and break-even. For example, when you think about distribution channels, revenue streams, or the relationship with the customer, ask customers what they expect.

Startup 161

Startup Angel Investor Technical Review Incubator 161

Startup Professionals Musings

JUNE 10, 2016

Expect some channel conflict as a cost of doing business. Before you expand into this arena, make sure you have the resources and expertise on the ground, and have done your homework on cost versus return. These expansions can be lucrative, but may require more complex strategic partner arrangements or even acquisitions.

Channel 120

Channel Distribution Partner Acquisition 120

Startup Professionals Musings

DECEMBER 7, 2013

Wessel also summarizes the costs and potential impacts of creating and building your startup in secondary markets, usually meaning not in Silicon Valley or one of the other super-hubs: It takes longer to raise money. Wessel measures a 39% acquisition advantage to being in-state. It’s very important.

Silicon Valley 256

Silicon Valley Las Vegas Phoenix Montana 256

Startup Professionals Musings

DECEMBER 20, 2012

Don’t forget a viable financial model of costs, margins, customer acquisition, and break-even. For example, when you think about distribution channels, revenue streams, or the relationship with the customer, ask customers what they expect.

Startup 296

Startup Angel Investor Technical Review Incubator 296

Startup Professionals Musings

OCTOBER 15, 2021

These steps are the new keys to driving business innovation, controlling costs, staying nimble, and getting better results: Build teams to meet goals rather than organization charts. Conventional hiring strategies usually follow a vanilla approach to talent acquisition. Focus on deliverables and skills required right now.

Demand 357

Demand Global Hiring Acquisition 357

Startup Professionals Musings

MAY 4, 2011

A strategic combination can win in a new segment of the market, which neither of you could do alone in the same timeframe or at the same cost. Cost sharing and economies of scale. Companies work together on segments of their business where they believe they can minimize costs but not jeopardize their unique attributes.

Partner 225

Partner Non-Compete Merger Technical Review 225

Startup Professionals Musings

OCTOBER 30, 2022

This is a key moment where your customer acquisition costs go way down, and your profits go way up. Of course you want your customer to come back, but the best ones also become your evangelists in bringing their friends to you, and broadcasting their positive experiences to the world through social media.

Customer 365

Customer Social Media Acquisition Internet 365

Startup Professionals Musings

JANUARY 15, 2021

Startup owners need to assume a three to five year wait for a liquidity event, such as acquisition or going public, before they can cash out. To retain control, the original founder must reserve the right of first refusal to buy shares back at cost from a partner who decides to leave early or stop working. In the U.S.,

Vesting 298

Vesting Dilution Stock Founder Vesting 298

Startup Professionals Musings

MARCH 20, 2020

Marketing costs and time go up, and the growth curve flattens. Customer acquisition gets harder and more expensive. Scrappy guerilla marketing based on personal contacts and word-of-mouth campaigns gives way to more expensive customer acquisition using advertising, trade shows, and a marketing agency.

Hockey Stick 307

Hockey Stick Guerilla Acquisition Revenue 307

Startup Professionals Musings

APRIL 16, 2016

Structure and monitor leading measures first, such as customer leads and solution costs. Lagging measures come later, including volumes achieved, cost of customer acquisition, and market penetration. You can’t manage and make rational decisions on things you don’t measure. Insisting on and nurturing total team accountability.

Social Media 120

Social Media Acquisition Finance Entrepreneur 120

Startup Professionals Musings

MARCH 15, 2023

The most common failures on the show, and in real life, are people who don’t know their margins, cost of customer acquisition, channels, or other key data. We have all seen the entrepreneur who believes that passion and emotion will overcome all investor objections and requests for answers.

Entrepreneur 279

Entrepreneur Due Diligence Angel Investor Silicon Valley 279

Startup Professionals Musings

JANUARY 6, 2020

Vendor costs are subject to change, customers are fickle, competitors come out of the woodwork and the economy can take a downturn. The manual calculations to translate market assumptions into costs, volumes, expenses and net return are massive. What if your customer acquisition cost assumptions have to change?

Conversion Ratio 308

Conversion Ratio Startup Business Model eCommerce 308

Startup Professionals Musings

JUNE 26, 2015

Skip the fuzzy marketing terms, such as "easier to use," "lower cost" and "disruptive technology." " Investors want to buy into an entrepreneur with a startup that can provide evidence of an ability to double customer productivity, at half the cost, with patented technology.

Intellectual Property 120

Intellectual Property Elevator Pitch Angel Investor Technical Review 120

Startup Professionals Musings

SEPTEMBER 11, 2021

One customer is not traction, and beta tests with a thousand customers at no cost don’t count. Customer acquisition cost. In an inverse fashion, real traction usually means that your cost to acquire a new customer is coming down rapidly, as your marketing kicks in, and your offering is known and accepted by the mass market.

Hockey Stick 304

Hockey Stick Early Stage Metrics Acquisition 304

Startup Professionals Musings

OCTOBER 19, 2015

The best technologies are barely invisible and low cost. The right marketing efforts can cost as much as the technology. Patents can raise startup valuation by investors by as much as a million dollars, and will attract acquisitions rather than copycats. New technology is so exciting it sells itself.

Technical Review 120

Technical Review Intellectual Property Cofounder Bootstrapping 120