Steve Blank

OCTOBER 24, 2016

The launch of the Xbox and Kinect, and the acquisitions of Skype and Yammer happened on his shift. If the Microsoft board was managing for quarter to quarter or even year to year revenue growth, Ballmer was as good as it gets as a CEO. On day one there are no customers to lose, no revenue and profits to decline. Lessons Learned.

Azure 120

Azure Business Model Cloud Artificial Inteligence 120

Steve Blank

OCTOBER 24, 2016

The launch of the Xbox and Kinect, and the acquisitions of Skype and Yammer happened on his shift. If the Microsoft board was managing for quarter to quarter or even year to year revenue growth, Ballmer was as good as it gets as a CEO. On day one there are no customers to lose, no revenue and profits to decline. Lessons Learned.

Azure 120

Azure Business Model Cloud Artificial Inteligence 120

Steve Blank

APRIL 12, 2010

In contrast, in a startup following the Customer Development process, this is when the founders realize that something is wrong with the business model (because revenue is not scaling.) In traditional startups this is when the VP of Sales or Marketing gets fired and the finger-pointing starts.

Business Model 333

Business Model Agile Customer Development Startup 333

Steve Blank

NOVEMBER 18, 2016

Most often the first acquisitions in a hype cycle are for the “shiny objects” – the technology, the team and the tools. The irony is that the acquisitions made later in the hype cycle – when companies have built real products that customers want, are the ones that generate revenue and profit for the acquirer.

Artificial Inteligence 320

Artificial Inteligence Lean Exit Strategy Startup 320

Steve Blank

APRIL 23, 2018

The entrepreneur who founded and grew the largest startup in the world to $10 billion in revenue and got fired is someone you have probably never heard of. A version of this article appeared in the Harvard Business Review. Elon Musk, Alfred Sloan, and entrepreneurship in the automobile industry. But not for Durant.

Michigan 271

Michigan Cofounder Stock Forecast 271

Steve Blank

NOVEMBER 16, 2009

In it, I got asked a question I often hear: “What if we have a web-based business that doesn’t have revenue or paying customers? And without revenue how do we know if we achieved product/market fit to exit Customer Validation?” They’re putting money into web services/business – most without early revenue. End of theory.&#

Customer Development 221

Customer Development Web Developer Customer 221

Steve Blank

JANUARY 14, 2014

A pivot may mean you changed your customer segment, your channel, revenue model/pricing, resources, activities, costs, partners, customer acquisition – lots of other things than just the product. A pivot can change any of nine different things in your business model. – then you’ll understand the power of the Pivot.

Business Model 331

Business Model Lean Customer Development Channel 331

Steve Blank

MARCH 18, 2011

VC’s worked with entrepreneurs to build profitable and scalable businesses, with increasing revenue and consistent profitability – quarter after quarter. With Netscape’s IPO , there was suddenly a public market for companies with limited revenue and no profit. 1970 – 1995: The Golden Age. Thus began the 5-year dot-com bubble.

Internet 334

Internet IPO Agile Silicon Valley 334

Steve Blank

MAY 6, 2015

These hypotheses span the gamut from who’s the customer(s), to what’s the value proposition (product/service features), pricing, distribution channel, and demand creation (customer acquisition, activation, retention, etc.). revenue streams generated by the value proposition(s). customer relationships to create demand.

Lean 120

Lean Agile Business Model Customer Development 120

Steve Blank

FEBRUARY 22, 2010

I had been confused for years why I had to update an income statement each board meeting that said zero for 18 months before we had any revenue. An early indication that you’ve found the right business model is when you believe the cost of getting customers will be less than the revenues the customers will generate. Financials.

Balance Sheet 300

Balance Sheet Startup Burn Rate Metrics 300

Steve Blank

DECEMBER 2, 2013

But the big payoff came when their discussions with medical device customers revealed an entirely new way to think about pricing —potentially tripling their revenue. As part of the revenue streams portion of the business model canvas, each team has to diagram the payment flows. the Customer Life Time (CLT)).

Customer 324

Customer Churn Rate Customer Development Lean 324

Steve Blank

NOVEMBER 18, 2016

Most often the first acquisitions in a hype cycle are for the “shiny objects” – the technology, the team and the tools. The irony is that the acquisitions made later in the hype cycle – when companies have built real products that customers want, are the ones that generate revenue and profit for the acquirer.

Artificial Inteligence 120

Artificial Inteligence Lean Exit Strategy Startup 120

Steve Blank

OCTOBER 31, 2014

But if you want to build a scalable startup you need to be asking how you can you get enough customers/users/payers to build a business that can grow revenues past several $100M/year. channel partners and Chinese manufacturers and customer acquisition and activation programs outside their home country. This meant they would need U.S.

Global 335

Global Australia Silicon Valley China 335

Steve Blank

APRIL 8, 2010

They collected information that justified their assumptions about the problem, opportunity, market size, their solution and competitors and the their team, They rolled up a 5-year sales forecast with assumptions about their revenue model, pricing, sales, marketing, customer acquisition cost, etc. It was an exquisitely crafted plan.

Business Model 329

Business Model Business Plan Customer Cap Table 329

Steve Blank

JUNE 23, 2016

Intel under their last two CEOs delivered more revenue and profit than any ever before. Capital is returned to these investors through liquidity events (originally public offerings, but today mostly acquisitions). Its acquisition of Android may have been the biggest bargain in corporate history.

Architecture 227

Architecture IRR Balance Sheet Liquidity Event 227

Steve Blank

JULY 15, 2010

Until 1995 startups going public typically had a track record of revenue and profits. Suddenly there was a public market for companies with limited revenue and no profit. The size of the red bars (IPO’s) versus blue (mergers and acquisitions) illustrates that while venture-backed startups did get acquired, the IPO market was booming.

Venture Capital 299

Venture Capital IPO Liquidity Event Entrepreneur 299

Steve Blank

MARCH 4, 2014

Sales teams are commission-based, executive compensation is based on EPS, revenue and margin, business units on revenue and margin contribution, etc. Corporate KPI’s, Policy and Procedures: Innovation Killers. What Does this Mean? Every time another execution process is added, corporate innovation dies a little more.

IRR 335

IRR Startup Business Model Agile 335

Steve Blank

FEBRUARY 23, 2016

In other words, how can we adapt the Business Model Canvas when the metrics of success for an organization is not revenue? From Revenue Streams to Mission Achievement. For these organizations, the canvas box labeled Revenue Streams doesn’t make sense. Revenue Streams changes to Mission Achievement. Lessons Learned.

Business Model 120

Business Model Revenue Channel Community 120

Steve Blank

MAY 28, 2009

Personally, I think that customer acquisition, brand, reputation, etc., In contrast, customer acquisition, brand, reputation, etc. These two numbers have direct impact on revenue and financial health. are much more differentiating than technology. Technology can often be dealt with through a press release (at least perception).

Vertical 145

Vertical Silicon Valley Marketing Customer 145

Steve Blank

SEPTEMBER 19, 2016

In the 21 st century the DOD/IC community have realized that adversaries are moving at a speed that our traditional acquisition systems could not keep up with. More than 70 percent of the In-Q-Tel portfolio companies have never before done business with the government. The program will scale to 13+ universities in 2017.

Silicon Valley 249

Silicon Valley Iraq Afghanistan Community 249

Steve Blank

FEBRUARY 12, 2015

We’re at 70 people, and we’ll do $40 million in revenue this year and should get to cash flow breakeven this quarter. ” Sales (and/or customer acquisition in a multi-sided market) becomes achievable by a sales force (or network effect or virality) without heroic efforts from the founders. It sounded like he was living the dream.

Startup 120

Startup Lean Venture Capital Advisory Board 120

Steve Blank

APRIL 1, 2020

Your revenue plans are no longer valid. What’s your monthly cash burn at your new low revenue level? The CEO should dial through as many of the largest existing customers to get a firsthand understanding of the magnitude of any revenue shortfall. How can you shift focus to customer retention versus acquisition?

South Korea 333

South Korea Salary Business Model Programming 333

Steve Blank

DECEMBER 7, 2010

What are your hypotheses around customer acquisition costs? Actually engage in “search engine marketing” (SEM)spend $20 as a team to test customer acquisition cost. Channel incentives – does your product or proposition extend or replace existing revenue for the channel? What types of revenue streams are there?

Wiki 312

Wiki Lean Management Business Model 312

Steve Blank

AUGUST 31, 2009

The first hint lies in its name; this is a product development model, not a marketing model, not a sales hiring model, not a customer acquisition model, not even a financing model (and we’ll also find that in most cases it’s even a poor model to use to develop a product.) So what’s wrong the product development model?

Customer Development 240

Customer Development Developer Customer Silicon Valley 240

Steve Blank

MARCH 11, 2015

And when we do make bets, they’re small bets on incremental products or acquisitions that simply add to the bottom line.”. They’ve figured out the revenue model (subscription, license, direct sale, etc.) Therefore, in a large company, failure to meet a goal – revenue, product delivery, service, etc.–

Widget 120

Widget Lean Business Model Metrics 120

Steve Blank

OCTOBER 24, 2017

— Unremarked and unheralded, the balance of power between startup CEOs and their investors has radically changed: IPOs/M&A without a profit (or at times revenue) have become the norm. Typically, this caliber of bankers wouldn’t talk to you unless your company had five profitable quarters of increasing revenue.

Founder 248

Founder Technical Review CTO Hire IPO 248

Steve Blank

DECEMBER 3, 2012

Plans and processes are in place, and rules, job specifications, revenue, profit and margin goals have been set. This might include new products, markets or acquisitions. Forecasts can be based on a series of known conditions. A New Strategy for Entrepreneurship in the 21 st Corporation.

Business Model 333

Business Model Customer Development United States Operations 333

Steve Blank

AUGUST 5, 2010

Drive for a repeatable and scalable business model (revenue in Dave McClure’s investment thesis, “ network of scale &# in Union Square’s.). But scaling customer acquisition may take the same amount of dollars as a traditional software startup. ). Their capital needs are low at the front end.

Lean 260

Lean Internet Silicon Valley Venture Capital 260

Steve Blank

SEPTEMBER 19, 2016

In the 21 st century the DOD/IC community have realized that adversaries are moving at a speed that our traditional acquisition systems could not keep up with. More than 70 percent of the In-Q-Tel portfolio companies have never before done business with the government. The program will scale to 13+ universities in 2017.

Silicon Valley 120

Silicon Valley Afghanistan Iraq Community 120

Steve Blank

DECEMBER 17, 2015

Time horizons for Return on Investment from a VC investment may be 7+ years, ROI from the acquisition of an earlier stage company, 4-5 years and the ROI from acquisition of a mature company, 2-3 years.) In Stage 2, the corporation adds venture capital and/or mergers-and-acquisition teams to provide these functions.

Silicon Valley 120

Silicon Valley Incubator Acquisition Business Model 120

Steve Blank

FEBRUARY 26, 2020

There are two reasons to raise money: You have a killer idea that is only partially validated, that you think can get to $50M+ of revenue in 5 years with 80%+ gross margins (if margins are lower, you need a lot more revenue)and you need money to get to product-market fit, or. Not all startups need outside investment to grow.

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

Steve Blank

NOVEMBER 2, 2009

Sales people cost money, and when they’re not bringing in revenue, their wandering in the woods is time consuming, cash-draining and demoralizing. Scalable: The goal is not to get one customer but many – and to get those customers so each additional customer adds incremental revenue and profit. Lets see why. Something else?

Lean 247

Lean Silicon Valley Startup RSS 247

Steve Blank

JUNE 7, 2010

The company had innovated, found a business model, grown successfully but now even as revenues continued to grow, the company was slowly but surely dying. As the revenues grew, engineering continued to pursue sustaining innovations - incremental improvements on its core technologies. It was impressive. More on this in another post.).

Silicon Valley 269

Silicon Valley Cofounder Acquisition Kansas 269

Steve Blank

DECEMBER 8, 2015

Acquiring a growth-stage private startup can provide a faster ROI at lower risk than the acquisition of an early- stage startup. For example, Google’s acquisition of Nest (which had customers, revenue and a distribution channel) allowed it to enter the connected home market immediately.

Silicon Valley 120

Silicon Valley Acquisition Boston Early Stage 120

Steve Blank

AUGUST 5, 2013

Regarding revenue, we made a big bet on “purchase intent.” We looked at social sites—like Facebook and Twitter—with huge user bases, but comparably small revenue. Thousands, then millions of new customers were coming to the site through SEO, just like we’d guessed with our customer acquisition hypothesis.

Lean 295

Lean Agile Customer Development SEO 295

Steve Blank

NOVEMBER 5, 2020

We’ve started to adjust our acquisition approach. And the departments have put out some very useful new guidance on how to approach software acquisition in a very different way than hardware acquisition. I’ve got to have access to recurring revenue to survive until then.” It’s this terrible situation.

Technology 304

Technology China United States Government 304

Steve Blank

NOVEMBER 25, 2013

These three tools allow startups to focus on the parts of an early stage venture that matter the most: the product, product/market fit, customer acquisition, revenue and cost model, channels and partners. Teams use the Lean Startup toolkit: the Business Model Canvas + Customer Development process + Agile Engineering.

Oakland 327

Oakland Incubator Lean Metrics 327