Both Sides of the Table

APRIL 26, 2016

The key to being able to run a business that isn’t yet profitable (on operating margin) is availability of capital to finance losses and preferably at a cost that isn’t too punitive to the founders and employees. CAC is often measured incorrectly and doesn’t often doesn’t capture the true costs of acquisition. The first input is CAC.

Metrics 150

Metrics Cost Acquisition Startup 150

The Startup Magazine

MAY 30, 2022

In the early stages of your new e-commerce venture, the expense of various small business shipping choices can add up quickly. This, on the other hand, can severely cut into your revenue. These things don’t cost much. The right packaging for your products can prevent higher shipping costs.

Small Business 166

Small Business Software Review Technical Review Early Stage 166

Startup Professionals Musings

JUNE 30, 2019

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. Nevertheless, it’s an option that doesn’t cost you equity.

Intellectual Property 219

Intellectual Property Technical Review Startup Incubator 219

Startup Professionals Musings

JANUARY 16, 2022

That means it solves a real problem for real customers who are ready and able to spend real money. The number of current potential customers is large and growing. MySpace, for example, boomed after launch for five years without a revenue model. Even the popular Snapchat is still struggling to generate revenue and profit.

Revenue 297

Revenue Widget Angel Investor Early Stage 297

The Startup Magazine

JUNE 1, 2023

As an early-stage company that just closed our seed round at $8.1 million at the end of last year, we’re laser-focused on fast growth without sacrificing customer experience. We’re hitting record revenue months, weeks, and margins. That includes us. And you know what we found? The faster you learn, the better.

Early Stage 146

Early Stage Los Angeles Silicon Valley Cofounder 146

David Teten

JANUARY 21, 2021

This essay is part of a series on alternative VC: I: Revenue-Based Investing: a new option for founders who care about control. II: Who are the major Revenue-Based Investing VCs? III: Why are Revenue-Based VCs investing in so many women and underrepresented founders? IV: Should your new VC fund use Revenue-Based Investing?

Equity 78

Equity Revenue Cofounder Colorado 78

Startup Professionals Musings

JULY 14, 2014

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. Nevertheless, it’s an option that doesn’t cost you equity.

Entrepreneur 283

Entrepreneur Intellectual Property Technical Review Incubator 283

Austin Startup

NOVEMBER 29, 2017

This 4-part story, however, explores the Austin ecosystem based on the 4Cs framework —  culture , capital, customers , and competencies. It follows up on my posts discussing why early stage startups should — or should not — move to Silicon Valley. Should Early Stage Startups Move to Austin because of Capital?

Early Stage 48

Early Stage Austin Silicon Valley Texas 48

SoCal CTO

MARCH 1, 2010

Startup Killer: the Cost of Customer Acquisition | For Entrepreneurs , February 2, 2010 Looks at the critical equation around customer acquisition cost vs. customer lifetime value similar to what I discussed in Startup Metrics but in more depth. Jason looks at the issues around "sunk cost."

Acquisition 150

Acquisition Cofounder Technical Cofounder Cost 150

Startup Professionals Musings

FEBRUARY 19, 2013

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. Nevertheless, it’s an option that doesn’t cost you equity.

Intellectual Property 309

Intellectual Property Technical Review Venture Capital Startup 309

YoungUpstarts

DECEMBER 7, 2017

Two conditions that do matter to your startup’s out-year viability are the cost and length of its product development cycle. Longer, costlier cycles drain cash on hand while delaying the onset of crucial revenue streams. Adequate documentation for Customs clearance. They quite literally can’t afford to wait.

Cost 100

Cost Developer Small Business Administration Marketing 100

Startup Professionals Musings

JANUARY 12, 2018

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. Nevertheless, it’s an option that doesn’t cost you equity.

Intellectual Property 134

Intellectual Property Technical Review Startup Incubator 134

Both Sides of the Table

MARCH 19, 2013

The line of reasoning goes, “Services businesses are not scalable and the market won’t reward this revenue so make sure that third-parties do your implementation or clients do it themselves. We only want software revenue.” If you’re an early-stage enterprise startup services revenue is exactly what you need.

Technical Review 403

Technical Review Software Review Startup API 403

ReadWriteStart

MARCH 3, 2021

Still, you need to find some way to pull your company out of this early-stage quicksand. First, we need to address the core challenges of developing effective early-stage growth strategies for new businesses. Many new businesses have a small customer base, limited revenue, and a finite amount of funding to work with.

Early Stage 125

Early Stage PPC Retention Churn Rate 125

David Teten

AUGUST 19, 2019

So you’re interested in raising capital from a Revenue-Based Investor VC. A new wave of Revenue-Based Investors (“RBI”) are emerging. For background, see Revenue-Based Investing: A New Option for Founders who Care About Control. At least 12 months of customer history, generally 20+ enterprise customers or 200+ SMB customers.

Revenue 60

Revenue Technical Review Software Review Equity 60

SoCal CTO

MARCH 18, 2010

Today I lead a small consultancy that helps advertising supported develop and scale the revenue producing sides of their businesses. I usually.just focus on revenue. My management book, Ignited, was released in 2007 and serves a guide and champion for middle managers. How do you explain your personal brand to people?

Los Angeles 225

Los Angeles Revenue Southern California Social Network 225

Both Sides of the Table

NOVEMBER 14, 2017

There is nothing more pure than building a product, putting it out in the world and seeing paying customers using your product and in some cases loving it. As an early-stage VC I love this phase. MakeSpace (as he named it) would help you get your excess goods into low-cost warehouses.

Operations 286

Operations New York City Technical Review Startup 286

David Teten

AUGUST 19, 2019

A new wave of Revenue-Based Investors are emerging who are using creative investing structures with some of the upside of traditional VC, but some of the downside protection of debt. I believe that Revenue-Based Investing (“RBI”) VCs are on the forefront of what will become a major segment of the venture ecosystem.

Revenue 60

Revenue Term Sheet Founder Technical Review 60

Eric Friedman

JULY 19, 2019

Many early stage investors look for financial models for 3+ years from founders to make an investment. Even if it’s too early, you are pre-revenue, or just at the idea stage I think its ok to hold your nose and go through the OpEx exercise. In fact, for early stage companies you are usually wildly wrong.

Early Stage 114

Early Stage Startup Framework Revenue 114

Startup Professionals Musings

JULY 16, 2012

The good news is that he is all about helping early-stage startups. These are emerging group of professional investors (venture capitalists, ala VCs), who are investing from a fund of other people’s money, with a particular focus on seed-stage startup opportunities. Early-stage startup. Super Angels.

Early Stage 253

Early Stage Finance Seed Stage Entrepreneur 253

Steve Blank

APRIL 23, 2014

buy out an entire company for its revenue and profits. A business model is all the parts of a strategy necessary to deliver a product to a customer and make money from it. Ventures that are further along and now executing their business model are no longer startups, they are now early-stage companies.

Acquisition 333

Acquisition Intellectual Property Silicon Valley Startup 333

YoungUpstarts

SEPTEMBER 7, 2014

For most startups, one of the most exciting and frustrating phases is deciding how to price their offering for their first paying customer. Because of these nuances, startups selling to enterprise customers must be even more diligent in tracking the right growth metrics. Revenue Growth. Lifetime Value/Cost of Acquisition.

Metrics 219

Metrics Churn Rate Startup Acquisition 219

Startup Professionals Musings

JULY 8, 2015

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. Nevertheless, it’s an option that doesn’t cost you equity.

Entrepreneur 120

Entrepreneur Intellectual Property Technical Review Incubator 120

ReadWriteStart

JUNE 1, 2020

The primary source of your funds should be your paying customers, i.e., your business should generate enough revenues and profits to fund the growth and expansion. Any custom manufactured IoT device would require software development as well as hardware customization. Early-stage. Government programs.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Startup Professionals Musings

MAY 1, 2011

The good news is that he is all about helping early-stage startups, the hard part for entrepreneurs is figuring out what it takes to play. These are emerging group of professional investors (venture capitalists, ala VCs), who are investing from a fund of other people’s money, with a particular focus on seed-stage startup opportunities.

Early Stage 231

Early Stage Seed Stage Angel Investor Silicon Valley 231

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. Plus, most early-stage M&A fails so this isn’t likely a good use of capital for a young company). Gross burn is the total amount of money you are spending per month.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

www.forentrepreneurs.com

FEBRUARY 2, 2010

Blog About Log in Register Startup Killer: the Cost of Customer Acquisition In the many thousands of articles advising entrepreneurs on what they have to focus on to build successful startups, much has been written about three key factors: team, product and market, with particular focus on the importance of product/market fit.

Acquisition 103

Acquisition Cost Customer Entrepreneur 103

Steve Blank

NOVEMBER 16, 2009

I was in New York last week with my class at Columbia University and several events made me realize that the Customer Development model needs to better describe its fit with web-based businesses. In it, I got asked a question I often hear: “What if we have a web-based business that doesn’t have revenue or paying customers?

Customer Development 227

Customer Development Web Developer Customer 227

Hearpreneur

OCTOBER 25, 2023

The expansion of e-commerce should also bring about seeing returns as a strategic lever, similar to how companies used faster delivery to drive customer experience and revenue. Think of it from the customer's perspective – Why should this customer shop from your store instead of the other stores selling this product?

eCommerce 132

eCommerce Omaha Entrepreneur SEO 132

Startup Professionals Musings

AUGUST 25, 2017

In case you haven’t noticed it, the rapid evolution of do-it-yourself (DIY) facilities for developers, including 3-D printers, SketchUp and makerspaces such as TechShop , have scaled down the cost of prototypes and hardware design by an order of magnitude. Quick low-cost design and fabrication alternatives are extremely valuable.

Technical Cofounder 153

Technical Cofounder Intellectual Property Wiki Cofounder 153

Startup Professionals Musings

SEPTEMBER 30, 2013

Don’t expect them to believe your $100M revenue projection, if you are still waiting for the first revenue dollar. For a business, you must define the absolute minimum features you need to satisfy the customer problem, and test it in the market. Get a real customer and real revenue. Only real results count.

Intellectual Property 281

Intellectual Property Entrepreneur Sweat Equity CTO Hire 281

Steve Blank

JUNE 27, 2017

Its employees and investors don’t depend on an existing revenue stream. If they select a business model that targets industry incumbents, they don’t have to worry about upsetting existing customers, partners or distribution channels. Every Airbnb rental is a lost night of revenue for hotels that hate it.

Startup 297

Startup New York City Valuation Distribution 297

ConversionXL

MARCH 17, 2021

And while this was a good start, a significant position of these companies were early-stage startups. MQL cost significantly increased. Many customers think about the solution or service as a fancy add-on, but not as a part of operational processes. Companies experience a high churn rate because of bad product adoption.

B2B 150

B2B Sales Cycle Belgium IP 150

Both Sides of the Table

APRIL 4, 2011

4 times / 100 means if a customer uses your app frequently (say 10-20 times / day) then they are crashing nearly every day. And given your stage of development you sure better at least know what your goal is. Because it can be hard to define or agree company objectives at an early stage I believe most people avoid them.

Metrics 346

Metrics Startup Acquisition SEM 346

The Startup Magazine

JULY 1, 2019

As a result, most of their owners’ energy goes towards getting customers. Numerous accounting systems such as QuickBooks Online, FreshBooks, and Wave exist to help small business owners perform basic accounting tasks in the early stages. This way, they not only save on costs but also get professional business advice.

CPA 92

CPA Software Review Bankruptcy Early Stage 92

Startup Professionals Musings

SEPTEMBER 20, 2021

Back in the early 2000s, the Maker Movement took hold in California, based on the emergence of such do-it-yourself (DIY) tools as 3-D printers, and now sites such as SketchUp and Makerspaces have all the tools you need to make almost anything computer related. Low-cost design and fabrication tools are extremely valuable.

Startup 397

Startup Cofounder Incubator Early Stage 397

Gust

JULY 8, 2012

The good news is that he is all about helping early-stage startups. These are emerging group of professional investors (venture capitalists, ala VCs), who are investing from a fund of other people’s money, with a particular focus on seed-stage startup opportunities. Early-stage startup. Super Angels.

Early Stage 177

Early Stage Finance Seed Stage Entrepreneur 177