Startup Professionals Musings

FEBRUARY 5, 2021

Project based on your market size how many widgets you will sell in every channel. Project your cash burn rate to keep at least 18 months between venture capital or angel investments. Forecast sales-volume expectations. This should always be a “bottoms-up” commitment from your sales team, not your own optimistic guess.

Forecast 369

Forecast Burn Rate Startup Widget 369

Startup Professionals Musings

MARCH 22, 2011

Next comes sales volume by channel. Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. Unless your volumes are in the millions or higher, the difference between manufacturing cost and customer price better be 50% or greater. This forecast is really their commitment.

Forecast 230

Forecast Burn Rate Startup .Net 230

Startup Professionals Musings

MARCH 25, 2010

Next comes sales volume by channel. Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. Unless your volumes are in the millions or higher, the difference between manufacturing cost and customer price better be 50% or greater. This forecast is really their commitment.

Forecast 151

Forecast Startup Burn Rate .Net 151

Steve Blank

NOVEMBER 2, 2009

The key contributors to an out-of-control burn rate is 1) hiring a sales force too early, 2) turning on the demand creation activities too early, 3) developing something other than the minimum feature set for first customer ship. And most startup code and features end up on the floor as customers never really wanted them.

Lean 244

Lean Silicon Valley Startup RSS 244

Startup Professionals Musings

DECEMBER 11, 2017

Based on your market size and penetration expectations, size how many units you will sell, at what price, in every channel. Calculate cash-burn rate and investment timing. Project your cash burn rate to keep at least 18 months between venture capital or angel investments. Project unit-volume and price levels.

Burn Rate 144

Burn Rate Forecast Angel Investor Revenue 144

Steve Blank

NOVEMBER 18, 2010

A business plan has a set of assumptions (who’s the customer, what’s the price, what’s the channel, what are the product features that matter, etc.) The web site and/or product presentation slides start changing and Marketing and Sales try different customers, different channels, new pricing, etc. that make up a business model.

Burn Rate 247

Burn Rate Management Business Model Customer Development 247

Up and Running

SEPTEMBER 17, 2014

ROI per Marketing Channel. It’s crucial to keep a handle of ROI per marketing channel in order to optimize marketing spending. This is the rate at which a company uses up its capital to finance overhead before generating positive cash flow from operations. It’s not enough to check this every quarter.

Metrics 146

Metrics Burn Rate Entrepreneur Forecast 146

YoungUpstarts

JANUARY 11, 2018

By saturating one market or sub-market at a time, we started building the best marketing channel there is: word of mouth (WOM). That’s why WOM marketing is the most ef- ficient marketing channel that exists. Our approach with VEEV — going slow in the beginning — actually made acquiring customers easier.

Los Angeles 133

Los Angeles Investment Bankers Cofounder Viral 133

Steve Blank

APRIL 20, 2009

In contrast, spark gaps are broad-band radio “noise&# sources – the idea of discrete radio channels was impossible spark gaps because of this. I’ll stop channeling James Burke now. But in fact, most startups need to keep their burn rate low more [.] to do that.

Silicon Valley 270

Silicon Valley RSS San Francisco Technical Review 270

Startup Professionals Musings

AUGUST 7, 2015

Partnerships, distribution channels and pricing models should be included. “If This allows them to calculate burn rates, break-even points and forecast the company valuation over time. Specific elements of your marketing and sales plans. If we build it they will come” is not a marketing and sales strategy.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

Steve Blank

FEBRUARY 22, 2010

What’s the distribution channel? Regardless of your type of business model you should be tracking cash burn rate, months of cash left, time to cash flow breakeven. A startup is a search for a repeatable and scalable business model. How do we price and position the product? How do we create end user demand? Who are our partners?

Balance Sheet 298

Balance Sheet Startup Burn Rate Metrics 298

Steve Blank

AUGUST 27, 2012

Other weeks Yuri would be buffeted by the realities of his burn rate, declining bank account and depressing comments from customers. He should make sure that there aren’t other parts of the business model (revenue model, pricing, partners, channel, etc.)

Founder 316

Founder Cofounder Advisory Board Burn Rate 316

Up and Running

DECEMBER 11, 2013

Investors like valuation to relate to actual business numbers, such as sales, gross margin (price less direct costs), and burn rate or fixed costs. More often, it’s secret formulas, secret ingredients, trade secrets, and relationships with channels of distribution. It’s simple math. . Sometimes it’s progress made in branding.

Valuation 136

Valuation Oregon Burn Rate Angel Groups 136

Startup Professionals Musings

JANUARY 4, 2015

Project based on your market size how many widgets you will sell in every channel. Project your cash burn rate to keep at least 18 months between venture capital or angel investments. Forecast sales-volume expectations. This should always be a “bottoms-up” commitment from your sales team, not your own optimistic guess.

Forecast 120

Forecast Entrepreneur Burn Rate Widget 120

Both Sides of the Table

MARCH 30, 2016

Mark dutifully went to partner meetings, back-channel references began, firms started calling existing VCs to “test prices” and we started debating whom our best partner would be. We had grown into a more reasonable burn rate so raising capital meant we would have many years of cash on the balance sheet.

Balance Sheet 150

Balance Sheet Burn Rate Valuation Forecast 150

Both Sides of the Table

APRIL 23, 2011

It has become a short form premium destination that is verticalizing content in category channels. They had a very expensive burn rate at the wrong time. Do you think a multi-channel distribution strategy is important to guard against unforeseen changes? (51:30 Why do you think Veoh didn’t succeed? (40:30 40:30 –41:30).

Vertical 265

Vertical Curation Boston Burn Rate 265

Hippoland

FEBRUARY 7, 2016

What customer acquisition channels / what have they tried / not tried / etc] [Is this growing? / May or may not ask this depending on if our hypothetical VC firm leads rounds or not] [What is a team’s burn rate?] [lifetime value] [How much revenue are you making and how has this changed over the last few months? how quickly?]

Burn Rate 48

Burn Rate IP Cofounder Differentiation 48

ReadWriteStart

JANUARY 27, 2011

This partnership speaks to a core philosophy of the program where we encourage entrepreneurs to get as much customer validation as possible before raising too much money, use other people's channels if you can get to them, don't burn too much cash, and all that good fiscal conservative stuff.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

Startup Lessons Learned

MARCH 13, 2009

Again, its critical to focus your marketing launch on those publications, venues, and channels that your potential partners are paying attention to. And even worse, wed cranked up the burn rate in order to be ready to handle all those millions of mainstream customers we anticipated. Instead, do your product launch first.

San Francisco 168

San Francisco PR Lean Early Stage 168

Hearpreneur

JULY 7, 2019

Over the next 10 years, entrepreneurship will reach a peak of new startups, increasing the burn rate of founders and the failure rate for new ecosystems. Using just a laptop and a digital camera, we’ve all got the chance to start the next killer podcast or youtube channel. Photo Credit: Mario Peshev.

Entrepreneur 90

Entrepreneur Distribution Employee Arizona 90

Steve Blank

SEPTEMBER 17, 2009

Customer Development is Low Burn by Design The Customer Development process keeps a startup at a low cash burn rate until the company has validated its business model by finding paying customers. The absolute number depends on your channel and industry.

Customer Development 242

Customer Development Developer Customer Silicon Valley 242

pandodaily.com

JULY 18, 2012

While a 21-year-old with no mortgage, no girlfriend and a low-burn rate may have nothing to lose, a 40-year old with a career, a mortgage and kids has everything to lose. There has to be nothing else in the world you can do and possibly be happy. No new parent is starting a company just for the life experience of starting a company.

Entrepreneur 45

Entrepreneur San Francisco Silicon Valley Technical Review 45