Steve Blank

SEPTEMBER 5, 2018

Reading the NY Times article “ Jeffrey Katzenberg Raises $1 Billion for Short-Form Video Venture, ” I realized it was time for a new startup heuristic: the amount of customer discovery and product-market fit you need to find is inversely proportional to the amount and availability of risk capital. ” Fire, Ready, Aim. IPOs dried up.

Lean 335

Lean Burn Rate Startup IPO 335

Up and Running

APRIL 6, 2020

This can be a daunting task, but the best place to start is understanding and calculating your cash burn rate and your cash runway. How do you calculate the burn rate? This total number is your Gross Burn Rate. Gross burn rate = (Total variable expenses + Total fixed expenses).

Burn Rate 100

Burn Rate Forecast SBA Cash Position 100

The Next Web

DECEMBER 2, 2013

Here are their breakdowns of the costs and time investments to create 10 of the world’s hottest startups. This means — assuming you already have a laptop — the cost is almost nothing to build the next Twitter. 1) Twitter. But a good developer could make it quicker.”. Others would say one million or a much bigger number. 4) WhatsApp.

Cost 168

Cost San Francisco New York City Ruby 168

Steve Blank

SEPTEMBER 3, 2014

I was driving home from the BIO conference in San Diego last month and had lots of time for a phone call with Dave, an ex student and now a founder who wanted to update me on his Customer Discovery progress. Customer Discovery. He worked hard to deeply understand the customer problems of these two customer segments.

Cofounder 336

Cofounder Founder Technical Cofounder San Diego 336

Startup Professionals Musings

OCTOBER 16, 2023

Projecting financials is a natural extension of the homework every entrepreneur needs to do on customer opportunity size, product costs, pricing, competition and customer value. Per-unit cost less cost of goods sold is your gross profit or margin. Quantify overhead costs. Marty Zwilling

Forecast 290

Forecast Burn Rate Widget Business Plan 290

Steve Blank

FEBRUARY 13, 2024

The moment I saw the product I knew every one of my professional graphics customers (ad agencies, freelancers, photo studios, etc.) But every graphics professional did own a CDROM drive but most didn’t own a high-resolution film scanner – and PhotoCD would have been perfect for them – and the perfect launch customer.

Search 256

Search Marketing Forecast Burn Rate 256

YoungUpstarts

JULY 31, 2019

They need to comply with laws, create back-end processes, and build prototypes — all of which cost money. Compounding the problem, founders often ramp up expenses and their burn rate as they collect fundraising debt, always expecting better performance to be just around the corner, and being prepared for the next round. .

Cofounder 118

Cofounder Burn Rate Technical Cofounder Seed Capital 118

YoungUpstarts

JUNE 20, 2019

Specifically, there are five challenges that emerging business typically put on the backburner between funding rounds: Seed to Series A: Customer Testing. Hypotheses should be tested extensively and disproven, which is where customer testing plays a central role for seed-stage startups. Series A to B: Identifying Company Blindspots.

Technical Cofounder 104

Technical Cofounder Burn Rate Seed Stage Cofounder 104

Steve Blank

SEPTEMBER 7, 2009

Finally, I’ll write about how Eric Ries and the Lean Startup concept provided the equivalent model for product development activities inside the building and neatly integrates customer and agile development. Three to six months after first customer ship, if Sales starts missing its numbers, the board gets concerned.

Customer Development 224

Customer Development Developer Customer Silicon Valley 224

Both Sides of the Table

SEPTEMBER 29, 2009

High burn-rates fueled by over investment – One of the most damning things that happened to the start-up markets in 97-00 and 05-08 was the overfunding of technology companies. Bu when you start to worry that the world is ending (as it seemed it was in late 2008 / early 2009) you tend to get worried about large burn rates.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Up and Running

FEBRUARY 20, 2015

If you’re running a subscription business , you’ll want to track churn rate, monthly recurring revenue, lifetime value, and so on. However, there are a number of metrics that every business owner should know, including cash flow, accounts payable, accounts receivable, direct costs, operating margin, net profit, and cash burn rate.

Metrics 60

Metrics Burn Rate .Net Churn Rate 60

Both Sides of the Table

NOVEMBER 3, 2009

In all of these new product and cost-focused new trends, a big problem has emerged that all of these movements have not addressed. It should talk about how many customers you think you will acquire and how much you’ll charge for your product. I care about the thought that you’ve given to the customer problem.

Business Plan 334

Business Plan AJAX Venture Capital Technical Review 334

Startup Professionals Musings

FEBRUARY 5, 2021

If you don’t have a destination, don’t waste your money trying to get there, and don’t expect anyone to support you along the way Projecting financials is a natural extension of the homework every entrepreneur needs to do on customer opportunity size, product costs, pricing, competition and customer value. Marty Zwilling.

Forecast 369

Forecast Burn Rate Startup Widget 369

View from Seed

OCTOBER 24, 2019

Also, the benefit of raising a pre-seed from great partners probably outweighs the cost. As a first time founder, having a few million dollars in the bank after a successful seed raise may seem like a huge amount of capital, and it’s easy to lose discipline around your burn rate.

Dilution 149

Dilution B2B Burn Rate Early Stage 149

Up and Running

APRIL 27, 2020

Current businesses are finding ways to pivot their business models, revisiting their budgets, and developing new forecasts to minimize their burn rate and maximize their available cash runway. That combination puts you in a great position to provide an inexpensive solution and win over customers. More room for competition.

Software Review 113

Software Review Lean Forecast Business Plan 113

Startup Professionals Musings

JUNE 18, 2012

I come from a high-tech software background, and only a few years ago, it would cost at least a million dollars ($1M) for a team of professionals to produce any commercial software product. Now, with open source software components, and low-cost development tools, the same job can be done by one good hacker for a few thousand dollars.

Cost 255

Cost Burn Rate SEM Startup 255

Up and Running

APRIL 22, 2020

Maintaining your business through the coronavirus crisis has likely led you to cut costs, revise your sales projections, and potentially seek out a loan to help you stay afloat. Second, if a requested loan is below a certain amount, depending on the size of the lender, the cost to service that loan is too high to make it worth it for them.

SBA 139

SBA Forecast Software Review Business Plan 139

Feld Thoughts

SEPTEMBER 16, 2011

They also haven’t launched a product, so there is no corresponding “cost of goods sold” – the direct cost of delivering their product. This results in a gross margin of $0, where gross margin is revenue – cost of goods sold. Once these were up Dick launched several AdWords campaigns to test customer interest.

Balance Sheet 125

Balance Sheet Fractional CTO Burn Rate Salary 125

Feld Thoughts

NOVEMBER 18, 2013

Convertible debt financings have become an increasingly attractive approach for seed rounds because it delays the valuation discussion, costs less from a legal standpoint, and is an easier financial instrument to “keep raising more small amounts of money” on. Three months in, the burn is now at $70k/month.

Burn Rate 152

Burn Rate Software Review Equity Early Stage 152

Up and Running

OCTOBER 7, 2019

A data-driven approach can help you make accurate and timely business decisions to meet market demands and improve cost-efficiency. Activation rate: measures how many visitors are engaging with your website or app. Customer churn rate: shows the percentage of customers lost in a given period (e.g., Marketing KPIs.

Founder 71

Founder Retention Metrics Technical Review 71

Both Sides of the Table

DECEMBER 16, 2009

.&# They know instinctually how customers buy and how to excite them. Because they’re street smart, most great entrepreneurs tend to prefer getting out and talking with real customers rather than sitting in a cubicle all day doing beautiful PowerPoint slides. They have a sixth sense for the competitors’ weaknesses.

Entrepreneur 306

Entrepreneur Burn Rate Cofounder Sales 306

ReadWriteStart

APRIL 26, 2011

MicroVentures does the due diligence for investors, running a variety of checks on financials, forecasts, use of funds, burn rate and so on. According to company CEO Bill Clark, "The lure of our site is that we do all the work while the entrepreneur can go back to building their product and gaining customers. Discuss.

Software Review 122

Software Review Accredited Investor Due Diligence Burn Rate 122

Startup Professionals Musings

DECEMBER 11, 2017

From my perspective, projecting financial returns is part of the homework every business person needs to do in sizing customer opportunity, product costs, pricing, competition and customer value, before expending their own resources in a highly risky venture. Quantify overhead and growth costs.

Burn Rate 144

Burn Rate Forecast Angel Investor Revenue 144

Gust

JUNE 10, 2012

I come from a high-tech software background, and only a few years ago, it would cost at least a million dollars ($1M) for a team of professionals to produce any commercial software product. Now, with open source software components, and low-cost development tools, the same job can be done by one good hacker for a few thousand dollars.

Cost 139

Cost Burn Rate SEM Startup 139

Both Sides of the Table

MAY 2, 2015

I love the enthusiasm, the boundless energy and the sense of possibility that comes from having an idea that hasn’t yet been beat up in the marketplace of competing ideas, customer contracts, VC skepticism, jaded journalists or fickle consumers who are on the The New, New Thing. But alas I must scale with businesses and make money.

Operations 150

Operations Metrics Early Stage Non-Compete 150

Startup Professionals Musings

JULY 27, 2014

It wasn’t so many years ago that starting a new e-commerce business on the Internet was a complex custom development project, usually costing a million dollars or more. Almost anyone can start a company today on a shoestring budget, following these cost-cutting recommendations: Establish a solid legal structure for your business.

Entrepreneur 260

Entrepreneur Burn Rate Social Media LLC 260

Startup Professionals Musings

DECEMBER 15, 2014

Count on several months of effort and costly assistance to court investors, with less than a 10% success rate. At least wait until later, when you ready to scale, and have some “leverage” based on a proven business model, some real customers, and real revenue. The best partners are ones who share costs and risks.

Bootstrapping 276

Bootstrapping Entrepreneur Startup Burn Rate 276

Steve Blank

FEBRUARY 22, 2010

As a founder you are testing a series of hypotheses about all the pieces of the business model: Who are the customers/users? 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. Who are our partners?

Balance Sheet 298

Balance Sheet Startup Burn Rate Metrics 298

Berkonomics

APRIL 16, 2020

Rent and other fixed costs continue, even when revenues have dried up – a fatal combination. FINANCIAL: Do you have twelve to eighteen months of cash to cover your “burn rate” now and as you recover? Plan for reductions in fixed overhead, salaries, and other costs now. So, here are three urgent questions for you.

SBA 87

SBA Burn Rate Salary Stock 87

Both Sides of the Table

OCTOBER 14, 2015

” It goes like this: What is your net burn rate? What is your revenue growth rate and what does this imply about your number of months of capital remaining? I encouraged them to stay in shorter-term space, higher per-unit costs but no capital outlays. What is your cash balance? Does this suck? It affects lives.

Burn Rate 150

Burn Rate San Francisco Private Equity LP 150

Up and Running

SEPTEMBER 17, 2014

Lifetime Customer Value. While everything having to do with your income and expenses is important for any entrepreneur to understand and monitor, the most important number to know by heart at any given time is your LTV: Lifetime Customer Value. How much do you earn per customer? . – James Simpson , GoldFire Studios.

Metrics 146

Metrics Burn Rate Entrepreneur Forecast 146

Startup Professionals Musings

JUNE 28, 2013

Count on several months of effort and costly assistance to court investors, with less than a 10% success rate. At least wait until later, when you ready to scale, and have some “leverage” based on a proven business model, some real customers, and real revenue. The best partners are ones who share costs and risks.

Startup 264

Startup Burn Rate Bootstrapping Valuation 264

Both Sides of the Table

FEBRUARY 25, 2019

What should the cash burn rate of the company be and how long of a cash runway should the company maintain? Should we cut costs, do layoffs, close divisions and focus scare resources on fewer projects? What are the kinds of difficult tasks that need to be solved by boards? The founders of a company are fighting.

LP 269

LP Startup Burn Rate Stock Options 269

Both Sides of the Table

JUNE 17, 2017

If you hire 6 senior sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business 6 months. They don’t want high burn rates but they will never fund slow growth. COGS” represents the amount that each sale costs you.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

Startup Professionals Musings

FEBRUARY 15, 2011

I come from a high-tech software background, and only a few years ago, it would cost at least a million dollars ($1M) for a team of professionals to produce any commercial software product. Now, with open source software components, and low-cost development tools, the same job can be done by one good hacker for a few thousand dollars.

Entrepreneur 235

Entrepreneur Burn Rate SEM Social Network 235

Up and Running

MARCH 26, 2020

Here are five suggestions to immediately improve your cash flow: Monitor your accounts receivable carefully: Accounts Receivable is the list of customers that owe you money. In a downturn, some of your customers will delay paying you and some will default. Credit card customers may dispute charges. Sales dropped suddenly.

Management 152

Management Forecast SBA Burn Rate 152

Startup Professionals Musings

AUGUST 27, 2012

Explain in analogies your mother could understand, and quantify the “cost-of-pain” in dollars or time. Here is how and why it works, including a customer-centric quantification of the benefits. Define the characteristics of the overall industry, market forces, market dynamics, and customer landscape. Business model.

Exit Strategy 247

Exit Strategy Elevator Pitch Burn Rate Merger 247