Steve Blank

JULY 30, 2014

Startups operate quickly – at a speed driven by the urgency of a proverbial gun-to-their-head called “burn rate.” their burn rate (the amount of money they’re spending monthly minus any revenue coming in) and. the day they run out of money and have to shut the doors (or get a new round of funding.).

Customer Development 335

Customer Development Design Developer Customer 335

Steve Blank

FEBRUARY 25, 2010

Your startup is an organization built to search for a repeatable and scalable business model. The next step in the Customer Development process is Customer Validation – making sure that there really is a repeatable and scalable revenue and business model before you turn up your cash burn rate.

Customer Development 266

Customer Development Web Developer Customer 266

Both Sides of the Table

JULY 16, 2013

The company with no revenue and a $150k burn rate that raised $2.5 I often wonder why they didn’t find a way to bring in some revenue to cover costs. Newsflash – if you had $75k revenue / month you’d have 8 months cash left in stead of 4. I see this weekly. million and has 4 months cash left.

Burn Rate 412

Burn Rate Dilution Revenue Valuation 412

Steve Blank

NOVEMBER 18, 2010

For decades startups were managed by pretending the company would follow a predictable path (revenue plan, scale, etc.) The Revenue Plan – The Third Fatal Assumption. Notice that the traditional product introduction model leads to a product launch and the execution of a revenue plan. Albert Einstein. Ritualized Crises.

Burn Rate 247

Burn Rate Management Business Model Customer Development 247

Steve Blank

FEBRUARY 22, 2010

Startups that are searching for a business model need to keep score differently than large companies that are executing a known business model. 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. Here’s why. Managing the Business. Financials.

Balance Sheet 298

Balance Sheet Startup Burn Rate Metrics 298

Startup Professionals Musings

JUNE 18, 2012

Founders now routinely use their home to operate their startup until they are well into the revenue phase. That’s a burn rate of at least $10K per month that can be eliminated if you are handy with computers and Quickbooks. Do basic Search Engine Optimization (SEO) and Marketing (SEM) yourself. Facilities and staff.

Cost 255

Cost Burn Rate SEM Startup 255

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.) Find a Brainstorm Buddy.

Founder 316

Founder Cofounder Advisory Board Burn Rate 316

Startup Professionals Musings

FEBRUARY 15, 2011

Founders now routinely use their home to operate their startup until they are well into the revenue phase. That’s a burn rate of at least $10K per month that can be eliminated if you are handy with computers and Quickbooks. Do basic Search Engine Optimization (SEO) and Marketing (SEM) yourself. Facilities and staff.

Entrepreneur 235

Entrepreneur Burn Rate SEM Social Network 235

Gust

JUNE 10, 2012

Founders now routinely use their home to operate their startup until they are well into the revenue phase. That’s a burn rate of at least $10K per month that can be eliminated if you are handy with computers and Quickbooks. Do basic Search Engine Optimization (SEO) and Marketing (SEM), like cohort analysis , yourself.

Cost 139

Cost Burn Rate SEM Startup 139

Startup Professionals Musings

FEBRUARY 13, 2010

Founders now routinely use their home to operate their startup until they are well into the revenue phase. That’s a burn rate of at least $10K per month that can be eliminated if you are handy with computers and Quickbooks. Do basic Search Engine Optimization (SEO) and Marketing (SEM) yourself. Facilities and staff.

Burn Rate 125

Burn Rate SEM Social Network Angel Investor 125

Steve Blank

NOVEMBER 2, 2009

And I can even imagine cases where it might burn more cash than a traditional startup. 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. Lets see why.

Lean 244

Lean Silicon Valley Startup RSS 244

Hearpreneur

JULY 7, 2019

I believe that there will be a significant increase in home-based entrepreneurs as automation and productivity technologies such as VR and voice search will help to eliminate mundane tasks and allow for business owners to be more efficient. Combining two or three similar companies will bring more clients, shared resources and gained revenue.

Entrepreneur 88

Entrepreneur Distribution Employee Arizona 88

Up and Running

AUGUST 21, 2014

If you’re in a really crowded area, let’s pretend one of you is selling flowers and competing in the online flower market, it’s going to be really hard to rank in search engines. From an SEO perspective, you can go and use Google Tools and find out how many people search on certain keywords.

Metrics 84

Metrics Startup Churn Rate Forecast 84

Up and Running

MAY 22, 2018

There is a tool called Google Keyword Planner that gives you insights into what people are searching related to your product, as well as search volume. Not only will this give you an idea of what people are thinking and searching, it will also give you the opportunity to tweak your product idea as per the demand.

Exit Strategy 90

Exit Strategy Angel Investor Search Elevator Pitch 90

Startup Lessons Learned

MARCH 27, 2009

The full formula works like this: runway = cash on hand / burn rate # iterations = runway / speed of each iteration Very few successful companies ended up in the same exact business that the founders thought theyd be in (see Founders at Work for dozens of examples). The key is to be able to refute as many major hypotheses as you can.

San Francisco 117

San Francisco Lean Continuous Deployment DC 117

dondodge.typepad.com

JANUARY 15, 2011

My next post will be about the importance of cash flow, keeping burn rates low, and how to avoid excessive equity dilution. from David Dalka - Creating Revenue and Retention - Chicago GSB MBA As discussed in my recent post about a TiE event on Chicago start ups, there are many factors to consider when taking in funding and employees.

Equity 40

Equity Employee Dilution Valuation 40

Both Sides of the Table

FEBRUARY 14, 2016

In the case of venture funding that shift was massive amounts of non-VC capital in search of higher returns and emulating the successes of Facebook, LinkedIn, Twitter plus the expectation of huge returns at Uber, Airbnb, Dropbox, etc. Huge funding increases lead to massive wage inflation, rent inflation and thus higher burn rates.

Valuation 150

Valuation Down Round Startup Later Stage 150

www.chubbybrain.com

SEPTEMBER 28, 2011

spent $20 million to get back to the same revenue that I had when I was CEO. created a vastly higher cost structure; I had 80 people mostly on base salaries under $100,000 and was bringing in revenue at the rate of $20 million annually. .”). Title: Burn Rate: How I Survived the Gold Rush Years on the Internet.

Software Review 79

Software Review Startup Technical Review Vesting 79

www.paulgraham.com

APRIL 28, 2010

There never has to be atime when you have no revenues. When you have a high "burn rate," youre alwaysunder time pressure, which means (a) you dont have time for yourideas to evolve, and (b) youre often forced to take deals you dontlike. Every startups rule should be: spend little, and work fast.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76