Both Sides of the Table

SEPTEMBER 28, 2014

So if your costs are $500,000 per month and you have $350,000 per month in revenue then your net burn (500-350) is equal to $150,000. Gross margin (GM) is the amount of profit you make per sale of your product or service taking into account your total costs of selling that product or service. Startup Lessons'

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

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. Let’s start with how much value you think you’ll create for your customer if they use your product in terms of hours saved, costs avoided, extra sales, better conversion rates or whatever.

Business Plan 334

Business Plan AJAX Venture Capital Technical Review 334

Both Sides of the Table

MAY 7, 2013

Anyone who reads this blog frequently will know that I am a big believer in low-cost video content and specifically the power of YouTube as a content creation & distribution platform. Production costs have fallen more than 90%. Distribution costs have, too. hours of TV / day. They read less than 30 minutes.

Video 320

Video Los Angeles Technical Cofounder CTO Hire 320

Both Sides of the Table

APRIL 4, 2011

The next step after measuring the customers you’re adding is to add the “cost to acquire” by channel. In the early phases if you can’t acquire customers cost effectively enough you’ll need to diagnose why and how to fix it. Make sure that you count the “true” cost to acquire customers. SEO is seldom “free.”. lowering $1.50

Metrics 346

Metrics Startup Acquisition SEM 346

Both Sides of the Table

DECEMBER 19, 2011

As people realized streamlining client-side development really matters to cost-effectively build software, new tool sets emerged to streamline the process. The costs of multi-platform development are too expensive. There is an acronym we use in computing called TCO or Total Cost of Ownership.

Web 355

Web AJAX Distribution HTML 355

Both Sides of the Table

MARCH 25, 2016

Lately I’ve been having to say things I thought I’d never have to remind people, like, “getting to positive gross margin in several territories is a very low bar to claim success” or “profitable excluding marketing costs” is not actually a real thing. But not doing basic research makes no sense.

Startup 150

Startup Seed Money DC Software Review 150

Both Sides of the Table

SEPTEMBER 17, 2013

Traditional video had very high costs of distribution due to limited time slots of broadcast TV (we only had enough spectrum to support 3-4 channels). Much of network television can cost $100,000 / minute to produce. Producers can cost-effectively test formats and build fans as they go. Much of it already is. Not so fast.

Video 339

Video Technical Review Distribution Aggregator 339

Both Sides of the Table

OCTOBER 30, 2014

Could we produce this at cost? It turns out that while she had the right idea the materials needed some reworking to come in at the cost structure required to build a business at scale.

Technical Review 418

Technical Review Software Review Due Diligence CTO Hire 418

Both Sides of the Table

NOVEMBER 29, 2010

.&# I took it to mean, “making decisions with small amounts of money (pennies) that end up making bad sense for affecting larger amounts of money (pounds, as in Great British Pounds).&# I thought of it as people who cut corners on small costs but paid dearly in terms of lost productivity on expensive staff.

Warrant 333

Warrant Germany France Cost 333

Both Sides of the Table

MAY 19, 2016

This may sound straightforward but to test for conditions with extreme accuracy and speed requires designing a small hardware device that is capable of creating a chemical reaction with food, interpreting the results in real time and doing so for a cost that is acceptable for consumers.

Cofounder 207

Cofounder Differentiation Hosting Design 207

Both Sides of the Table

FEBRUARY 7, 2013

He then pointed out that for service-based businesses every slot that went unfilled the provider had very high fixed costs and very low marginal costs and people ought to be willing to sell low-demand or last-minute expiring times at a discount while selling premium times at full price or even a surge price.

Southern California 359

Southern California San Francisco CTO Hire SEM 359

Both Sides of the Table

MARCH 19, 2013

It’s Profitable Revenue Covering Your Fixed Costs. Need I point out that the $500,000 is still profitable revenue that can contribute to your central costs of running your business? They are the gateway to your growth. Professional services = upsell + cross sale + new business units. That it is non-dilutive financing?

Technical Review 403

Technical Review Software Review Startup API 403

Both Sides of the Table

OCTOBER 10, 2011

Each customer segment of your business needs to be analyzed to determine whether they are profitable enough given ongoing costs to serve them relative to the revenue you would receive and the retention money you’d have to money to keep them with your service. A 20% savings for a cost conscious consumer. If they were on the $9.99

Customer 287

Customer Technical Review Caching PR 287

Both Sides of the Table

NOVEMBER 3, 2015

We we backed Team Grove’s mission (Kevin sourced the deal and joined the board) and just encouraged the team not to ramp up costs like many contemporary startups because we’re going to play the long game. Yet it can be personal, low-cost and ubiquitous. eliminating herbicides & pesticides. ” Enter Grove.

Technical Review 150

Technical Review Software Review Founder Boston 150

Both Sides of the Table

JANUARY 11, 2014

The more the supply of dollars spent in your channel the higher the cost-to-acquire new customers. Traders call this “arb” (arbitrage) and anyone who knows anything about arb knows that it only lasts for short periods of time until others discover the game and you must go in search of your next cost-effective channel.

Technical Review 384

Technical Review Hockey Stick SEM Channel 384

Both Sides of the Table

SEPTEMBER 22, 2012

He also nails the reason why venture capital is still necessary to grow large businesses quickly in a world where the costs of running startups have fallen dramatically. He talks about making things that people want & going after a big enough market. “Why do founders want to take the VCs’ money? Growth, again.

Silicon Valley 390

Silicon Valley Venture Capital Startup Technical Review 390

Both Sides of the Table

JUNE 30, 2011

Or the Cliff Note’s version: Open Source & Cloud Computing (led by Amazon) drove down tech startup costs by 90%. The lower costs & lower barriers to entry support this. This is the final part of a 3-part series on the major changes in the structure of the software & the venture capital industries.

Venture Capital 289

Venture Capital Early Stage Valuation Angel Investor 289

Both Sides of the Table

OCTOBER 8, 2014

He presented a system where your search results would be ranked based on companies bidding for placement and where merchants would be charged on a “cost per click” basis (CPC). What was Bill Gross’s heretical idea as portrayed to the tech elite?

Los Angeles 376

Los Angeles Silicon Valley Entrepreneur Seattle 376

Both Sides of the Table

FEBRUARY 9, 2013

Cost focused. Trevor for those who know his is an intense and focused dude. And he has an edge. And I like it. I’ll bet that Trevor is on the right track in life. Kind of like Dave McClure.

Software Review 398

Software Review Technical Review China Mexico 398

Both Sides of the Table

FEBRUARY 14, 2010

40% of costs are labor, 40% are materials and 20% are overheads. 23% of all costs are inefficient. Believing your own hype: And this data subtly sinks into the psyche of your company. It becomes folklore. 13% of GDP is construction – the largest industry. 18% of all errors come from people using the wrong documents.

Investment Bankers 415

Investment Bankers Mobile Software Review Japan 415

Both Sides of the Table

JUNE 22, 2015

However, the higher you get within an organization in the sale (and the larger the deal) executives are often looking to “win in the market,” which means growing revenue faster, offering products or services at a lower cost or offering features that their competitors can’t.

PR 150

PR Early Stage Software Naming 150

Both Sides of the Table

DECEMBER 16, 2009

We missed our sales targets that year by 66% and the next year by 45% and never really cut costs very much. If the tool doesn’t grow his revenue then how is he going to cover the additional costs – especially in this market?&#. The company incinerated cash. And I asked to leave the board. Or I was asked.

Entrepreneur 306

Entrepreneur Burn Rate Cofounder Sales 306

Both Sides of the Table

JANUARY 12, 2014

But of course it wasn’t always so and many online companies gamed the system by paying third-party firms to build link networks of websites set up by hand in low-cost countries to drive up the PageRank of websites. This industry is so mature now that the cat-and-mouse game between companies and Google has gotten sophisticated.

SEM 379

SEM Viral Marketing Widget 379

Both Sides of the Table

MARCH 30, 2010

banner ads on a CPM, CPC or a Cost-Per-Install [CPI] basis). For example, when a user downloads somebody else’s application by clicking an ad in your app and then downloading it from the App Store, you will be paid on a CPI (cost per install) basis. It’s also a great example of why transparency is so important.

Mobile 282

Mobile Management Southern California Application Development 282

Both Sides of the Table

OCTOBER 3, 2013

When all of that was built we knew the next major step was to figure out how to go national on a cost-effective basis and – of course – how to make this available on your mobile phone. We built “book it now” functionality in LA and then San Francisco.

Development Team Review 324

Development Team Review Los Angeles San Francisco Mobile 324

Both Sides of the Table

APRIL 6, 2014

When they rep you, the marginal cost of them trying to get you a slightly better deal is high for them relative to settling and moving on. In the 70+% case where you have done a good job in your interviews these will sound minor and in fact probably will be. They hold out. They wait for a better offer. They’re not in a rush.

Technical Review 302

Technical Review Hiring Later Stage Employee 302

Both Sides of the Table

AUGUST 27, 2012

Our inability to cost-effectively educate large numbers of people to compete in the future world where software really does begin to eat the world (in Marc Andreessen’s wise words). Not just in Silicon Valley but in LA, NY, Seattle and other major tech markets. “ And my fear? The only thing that slows us down?

Silicon Valley 299

Silicon Valley Technical Review Early Stage Cofounder 299

Both Sides of the Table

MAY 2, 2015

It’s such a tricky balance between being cost-focused & scrappy versus being impractical with how you spend your time. What if you are measuring CAC wrongly and you’re really not acquiring customers cost effectively? If I could bottle this moment and spend all my time here I would be in heaven. And so must you.

Operations 150

Operations Metrics Early Stage Non-Compete 150

Both Sides of the Table

FEBRUARY 15, 2016

Some companies may be able to become “cockroaches” or “ramen profitable” but cutting costs and staff substantially and getting to a burn rate that last 2 years. They may push you to cut costs. Again, I know this sounds very obvious but in practice it isn’t always.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

Both Sides of the Table

JULY 1, 2010

I helped make this decision by “triangulating&# between our DBA, lead technical architect and our VP of Engineering (who had a better grasp of the financial costs & development costs of each decision). I could never have been involved in this decision without “dipping&# below my CTO to understand the details.

CTO Hire 308

CTO Hire Management Technical Review Part-Time VPE 308

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. COGS” represents the amount that each sale costs you. After all, they doubled their operating costs when they weren’t even profitable.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

Both Sides of the Table

AUGUST 14, 2017

The overwhelming majority of conflicts that I’ve seen on boards over the years are a result of the tensions of either: underperformance of a company in which executives blame the action of each other or specific individuals founders or senior executives in a company upset that they don’t have the right role, title or compensation organizational changes (..)

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

Both Sides of the Table

OCTOBER 25, 2009

Azhar researched all possible locations for our Indian office based on: ease of travel, cost of employees, technical abundance, annual staff attrition rates, local infrastructure and safety for our UK employees who would spend a lot of time down there setting things up. He also had experience in setting up tech development centers in India.

Pakistan 297

Pakistan India Technical Review Software Review 297

Both Sides of the Table

NOVEMBER 29, 2014

But at the end of the year you write your own ticket if you’re talented because now you have experience and it cost you less than your law school loans! Unfortunately once you’ve earned mega bucks most people have ramped up their lifestyle and cost base such that they can’t take the hit.

Founder 409

Founder Salary Startup Early Stage 409

Both Sides of the Table

JUNE 19, 2017

Gross burn is your cost base and net burn is the difference between your revenue and costs. If your revenue grows you can afford to increase your cost base. Sometimes, of course, reducing burn means cutting costs which usually means cutting staff. So let me walk you through the discussion points I have with founders.

Burn Rate 212

Burn Rate Startup .Net Venture Capital 212

Both Sides of the Table

JUNE 23, 2013

The easiest thing for you to quantify are the hard costs associated with your product. For example, if you offer a product that a customer believes he or she can simply build themselves they often won’t factor in the development costs of building the product and even more importantly the maintenance costs of keeping the product up to date.

Sales 328

Sales Campaign Sales Cycle Early Stage 328

Both Sides of the Table

NOVEMBER 5, 2012

Costs of product on YouTube content is literally 99% cheaper than traditional TV and; Distribution of content can now go viral and can predictably distributed via social networks. Hits driven businesses come when production costs or distribution costs are so high that you need a home run to cover the huge costs of development.

Silicon Valley 374

Silicon Valley Los Angeles Distribution Java 374