A Smart Bear: Startups and Marketing for Geeks

OCTOBER 11, 2010

Yeah yeah, nowadays marketing is about "relationships" and "authority" and other things which cost time but not money. It sounds simple: The average cost of acquiring a customer is $C (advertising, sales, support, doing demos) and the lifetime revenue you get from that customer is $R, so if C < R you have a business.

Software Review 261

Software Review Technical Review Viral Software Developers 261

A Smart Bear: Startups and Marketing for Geeks

NOVEMBER 14, 2011

You can’t sell anything without significant traffic, especially since 80% of it is crap even with a good campaign, and it is preferable that some of that traffic is not costing you dollars per click. On top of that, the cost has escalated tremendously over time.

Campaign 272

Campaign Software Review Brazil Conversion 272

A Smart Bear: Startups and Marketing for Geeks

DECEMBER 21, 2009

This gets you to crystallize what cost-centric activities would most help your business. Before you argue that the cost is too great, factor in the lost revenue due to you working on those tasks. Before you argue, don't forget about the cost of lost sales.). Consider an intern or consultant. It's accurate.

Startup 315

Startup Revenue Cofounder Sales 315

A Smart Bear: Startups and Marketing for Geeks

MAY 24, 2010

You set up the escrow agent and bear all costs." If someone sues us over your product, you have to pay our legal costs." A good software license agreement that you can re-use in a variety of situations can cost anywhere from $1000 to $5000. Indemnification is also a standard clause that is difficult to get removed.

Software Review 233

Software Review Technical Review Sales Software 233

A Smart Bear: Startups and Marketing for Geeks

JULY 23, 2013

I know the argument: The pay-back period on sales, marketing, and up-start costs is long, but there’s a profitable result at the end of the tunnel. The mindset works like this: It costs a lot of money to land an enterprise customer. So these costs are amortized over the customers you do land. for every $1.00 Just wait!

Business Model 335

Business Model .Net Revenue IPO 335

A Smart Bear: Startups and Marketing for Geeks

FEBRUARY 23, 2016

Investors and founders alike have been obsessed about “growth at all costs,” just as a virus colony grows without care to its effect on its host cells or whether the colony’s growth ends up destroying the host body completely, taking the colony down with it in a viral version of Lord of the Flies. The problem is “growth at all costs.”

Technical Review 120

Technical Review Viral Metrics Salary 120

A Smart Bear: Startups and Marketing for Geeks

FEBRUARY 14, 2012

Often they’ll agree if it means a steep hourly discount or cheaper maintenance costs.) The contract says you retain the IP and are allowed to sell a product like this to other companies. You build the product, then you have your banner customer and go get others. You think you have a great idea.

Customer 231

Customer Software Review IP Technical Review 231

A Smart Bear: Startups and Marketing for Geeks

FEBRUARY 11, 2014

If you like this, go see his Shockwave Innovations blog ) Anyone that has taken an accounting class or learned basic business financials knows the interaction between key elements of a P&L (revenue, cost, expense) and a balance sheet (assets, liabilities, equity). At that point, you’ve recovered the cost to acquire the customer.

Churn Rate 288

Churn Rate .Net Metrics Hosting 288

A Smart Bear: Startups and Marketing for Geeks

APRIL 29, 2013

One of the root questions you have at the start, which is supposed to be data-driven (but you don’t have data) is: What’s the maximum I should bid for CPC (cost-per-click) campaigns like Google AdWords? So to compute CAC, take your total costs to acquire new customers and divide by the number of customers you acquired.

Bootstrapping 285

Bootstrapping Affiliate Cofounder Channel 285

A Smart Bear: Startups and Marketing for Geeks

JANUARY 7, 2014

Today you have a business plan, featuring a plausible growth trajectory (neither too conservative nor too optimistic), and an associated cost structure to drive signups and service customers. Costs arise ahead of associated revenue, especially for SaaS companies, so you need a cash investment to fund that growth.

Revenue 270

Revenue Finance Equity Engineer 270

A Smart Bear: Startups and Marketing for Geeks

SEPTEMBER 10, 2013

When you add up all our costs in Sales and Marketing (SaaS metric: CAC), the result is very small compared to the total revenue we’ll earn from than customer over the next few years (SaaS metric: LTV). ” Here’s the logic: We (Rackspace) have extremely efficient mechanisms for acquiring customers.

Metrics 238

Metrics Revenue Flash Later Stage 238

A Smart Bear: Startups and Marketing for Geeks

JULY 4, 2011

We were denying our prospects the possibility to contact us in a highly cost-efficient manner. While transitioning toward unified email setup about two years ago, we uncovered what I believe to be two common antipatterns : Not advertising a public email was bad.

Email 267

Email Cofounder Technical Review Technical Cofounder 267

A Smart Bear: Startups and Marketing for Geeks

OCTOBER 4, 2016

past product/market fit and into tens of millions in revenue), you realize that cancellation scales with total customers whereas growth scales with sales and marketing costs, which means cancellation necessarily and always outgrows inbound activity, thus growth ceases. Once you’re scaling (i.e.

Metrics 270

Metrics Retention Revenue Equity 270

A Smart Bear: Startups and Marketing for Geeks

MAY 1, 2012

For example, the average cost of customer acquisition diminishes. Suppose you discover that it costs $60 to acquire a new $10/mo customer which is too much to be sustainable — perhaps, but that cost diminishes over time, so it’s not a long-term problem.

Customer 320

Customer Revenue Acquisition Cofounder 320

A Smart Bear: Startups and Marketing for Geeks

NOVEMBER 13, 2012

You should not be focussed on automation, nor on cost-cutting. Cutting costs at this stage cannot lead to a significant change in the business. I’ve heard automation is important for scaling a business and I think I could save something like $1000 if I worked on that, so should I do that? What would you do with it?

Affiliate 261

Affiliate Revenue Bootstrapping Campaign 261

A Smart Bear: Startups and Marketing for Geeks

AUGUST 23, 2010

A simple product with few features, low-cost, pain-point obvious, not tackling complex problems, focussed on making life easier rather than on saving money.) Our company has core value X that we exude everywhere from our AdWords to our tech support to our product. Example value: Simplicity.

Software Review 275

Software Review Technical Review Software Advertising 275

A Smart Bear: Startups and Marketing for Geeks

APRIL 12, 2010

They were the disruptors, but they didn't profit from the disruption. Disruptive technology often comes from research groups commissioned to produce innovative ideas but unable to capitalize on them.

Technical Review 243

Technical Review Software Review Engineer Search 243

A Smart Bear: Startups and Marketing for Geeks

JANUARY 10, 2011

Pet owners who like the cards will look on the back to see how to order some of their own, and suddenly you have a viral marketing campaign that cost you lots of initial legwork calling vets but not a lot of money. Maybe, maybe not, but this gets the ball rolling. Working the pain in B2B.

Software Review 232

Software Review Technical Review .Net Design 232

A Smart Bear: Startups and Marketing for Geeks

APRIL 11, 2017

It’s wise because costs are low (every vendor is thrilled to have new business) and if you can get people to buy when money is tight, you’ve really proved you have a desirable product. I started Smart Bear in a recession (2002) and it went great. I’ve been explaining for eight years why recessions are a great time to start a company.

Bootstrapping 156

Bootstrapping Engineer Sales Cost 156

A Smart Bear: Startups and Marketing for Geeks

DECEMBER 5, 2011

Take NetFlix: The costs of inventory logistics, millions of non-technical customers, the Postal Service, and loss from wear and delivery will make profit impossible with a reasonable retail price. (Powered by LaunchBit ). I can rip any business idea to shreds. People will copy movies, pissing off suppliers.

Lean 281

Lean Analytics Metrics Engineer 281

A Smart Bear: Startups and Marketing for Geeks

JANUARY 15, 2013

But wait, doesn’t that mean a pay raise to cover cost-of-living? I suppose I could “justify” the cost of living salary increase using these incidents as “business cases,” but why should I rationalize? But wait, isn’t that an HR no-no? Well, devotion works both ways.

San Francisco 247

San Francisco Austin PHP Social Media 247

A Smart Bear: Startups and Marketing for Geeks

AUGUST 20, 2013

percent of MRR left over after paying for the cost of servicing the customer, such as servers, bandwidth, and tech support), and N is “expected months,” i.e. how many months you expect this customer to stick around: The trick is computing N ; the other numbers are straightforward. Which then leads to unprofitable growth.

Retention 262

Retention Metrics Revenue Bandwidth 262

A Smart Bear: Startups and Marketing for Geeks

DECEMBER 8, 2015

Now suppose someone walks up and sees “50% utilization” and says “Hey now, this is a server, not a person, it costs the same whether we drive it at 50% utilization or 90% or 99%. The system is now brittle — not good for costs, not good for the quality of the product or customer experience — just bad all around.

Web 120

Web Cost Product Operations 120

A Smart Bear: Startups and Marketing for Geeks

AUGUST 8, 2012

It cost you less than a week because you’ve got your template and you’re fast and smart, and you’re done. They had, maybe, a bad experience or it cost a lot of money, and the whole idea is to pay between $25 and $50 a month to get a higher quality website than what they have right now. Jared: Sure. Jason: In revenue.

API 220

API Software Review Hosting Technical Review 220

A Smart Bear: Startups and Marketing for Geeks

JUNE 13, 2011

Conversely, at ITWatchDogs the company’s internal and external culture was that we’re low-cost, friendly, approachable, regular guys, who understand exactly what you worry about, exactly what your budget is, and we nail it. The site might have looked bad , but our message couldn’t have been clearer.

Design 253

Design Lean Database Cofounder 253

A Smart Bear: Startups and Marketing for Geeks

OCTOBER 18, 2016

At some point, “just ploughing back into a 10x growth objective” is not the optimal strategy for making your so-called “dent in the universe.”

API 120

API Social Media Revenue Advertising 120

A Smart Bear: Startups and Marketing for Geeks

AUGUST 21, 2012

Of course it costs $3000 more than reading blog posts (including airfare and hotel), which sounds steep. Pin It If you run your own software company, or you want to, going to Business of Software is possibly the most useful thing you can do this year.

Software 225

Software Video Metrics Web 225

A Smart Bear: Startups and Marketing for Geeks

APRIL 28, 2014

Large company should send a few emails to the customer base, generating easy sales at no cost, and the revenues are split. Startup is good at innovation but weak at distribution; big company is complementary, thus they should trade. Free money for all, thus good deal for all.

Startup 293

Startup Hosting Distribution Revenue 293

A Smart Bear: Startups and Marketing for Geeks

JANUARY 1, 2013

Cramming a few hours more work into a day, after you’re already tired, costs you 50% productivity over the next day or two. Every bottle of medicine in your house says to consult a doctor if you have three or more drinks a day. So drink less than that. Sleep enough. Obviously not worth the trade, just on the basis of pure productivity.

Cost 311

Cost Product 311

A Smart Bear: Startups and Marketing for Geeks

FEBRUARY 1, 2010

What are three tangible, undeniable ways in which your product/company saves more money than you cost and saves more time than you consume? How can you call yourself an expert when you've only been at this for a year? Truly great products and companies are rare, even when smart people are at the helm. Do you have more Q&A to contribute?

Bootstrapping 227

Bootstrapping Design Cost Customer 227

A Smart Bear: Startups and Marketing for Geeks

MAY 8, 2012

Every day you delay the decision is costing you. While I was bootstrapping WP Engine I constantly heard that we’re hamstrung by not taking an investment; after raising a Series A a different set of people expressed their disappointment that I had “sold out.” ” Who’s right?

Bootstrapping 231

Bootstrapping Hiring Engineer Web 231

A Smart Bear: Startups and Marketing for Geeks

APRIL 24, 2012

So let’s re-do it: Say you’ll make $75k/year salary but you were making $150k/year as a consultant, so your nominal opportunity cost of being with this company for four years is $300k. The $1000/hour thing is based on 100% risk with no salary, which is not your situation.

Salary 229

Salary Stock Startup Valuation 229

A Smart Bear: Startups and Marketing for Geeks

OCTOBER 7, 2013

” It turns out you can compute the same ratio using GPM and COC (Cost of Cancellations) , neither of which pretend to be able to look out years into the future. Or better in my opinion, CAC/MRR/GPM so that we’re accounting for the costs to serve those customers. For example, if LTV is steady, is that OK? Is that good?

Metrics 244

Metrics Technical Review Revenue Cost 244

A Smart Bear: Startups and Marketing for Geeks

JANUARY 28, 2014

But for those of you in the earlier stages of your companies, when you project 5x growth coupled to just 5x the costs (or only 3x the costs because you’ll get cost-savings at scale), you’re guessing low.

Technical Review 275

Technical Review Social Media Engineer Cost 275

A Smart Bear: Startups and Marketing for Geeks

DECEMBER 28, 2011

What’s the cost of continuing to run this company in a way that may have that sort of more traditional trajectory. What’s the cost of that? Well the cost of that might be my satisfaction. But I think what we see often is the costs that do come with that. Adelaide: Absolutely.

Cofounder 223

Cofounder New York Conversion Entrepreneur 223

A Smart Bear: Startups and Marketing for Geeks

SEPTEMBER 4, 2012

The one thing that you might be able to do is outsource the development costs of it. But even if it’s national, our trips cost about $1000 per trip. I don’t know what your investment potential is. Interviewee: Right. Jason: Well, that’s… Gelie: But, yeah… Hamid: It’s hard, often times, local.

Cofounder 199

Cofounder Technical Review Chicago Technical Cofounder 199

A Smart Bear: Startups and Marketing for Geeks

DECEMBER 19, 2011

But McDonalds and Ford were first and kept their leads, because they never stopped innovating in process and product, constantly driving down costs while adding new desirable features, using their lead to fund even stronger growth. Amazon is the quintessential example in the hosting industry.

HTML 243

HTML Hosting Engineer Leadership 243