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. It’s the antithesis of the Lean Startup.

Lean 335

Lean Burn Rate Startup IPO 335

Startup Professionals Musings

AUGUST 19, 2020

Cash flow is a basic survival metric for every startup. Yet it always amazes me that I can find two different startups, seemingly working on the same problem, with one having a burn rate several times higher than the other. Things will cost more than you expect. They understand startup realities. You will make mistakes.

Burn Rate 310

Burn Rate Hockey Stick Salary Angel Investor 310

Startup Professionals Musings

JUNE 21, 2020

Some analysts argue that revenue drives growth, while others say user growth drives revenue. Google reached $1B in revenue within five years of incorporation, and now has a market capitalization of over $1 trillion. Long-term stability requires revenue growth and profit. Both have worked. Traditionally, it was simple.

Revenue 434

Revenue Valuation Viral Retention 434

Startup Professionals Musings

SEPTEMBER 29, 2018

Cash flow is a basic survival metric for every startup. Yet it always amazes me that I can find two different startups, seemingly working on the same problem, with one having a burn rate several times higher than the other. Things will cost more than you expect. They understand startup realities. You will make mistakes.

Burn Rate 223

Burn Rate Hockey Stick Startup Salary 223

ReadWriteStart

JUNE 1, 2020

I have often been asked about Startup Funding by entrepreneurs. Many myths surround the subject of startup funding. Here is Startup Funding, a Comprehensive Guide for Entrepreneurs. You must have seen a lot of startups giving out promotions, discounts, and incentives at the early phase of their business.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Steve Blank

JUNE 27, 2017

As more and more companies face disruption from globalization, new technology, and startups that have more capital than the incumbents, the continuing cry from Wall Street investors is, “Why can’t companies be as innovative as startups?”. Here’s one reason why: Startups can do anything. Startups can do anything.

Startup 275

Startup New York City Valuation Distribution 275

Both Sides of the Table

NOVEMBER 14, 2017

Nearly every successful tech startup I’ve observed over the past 20 years has gone through a similar growth pattern: Innovate, systematize then scale operations. Innovate In the early years of a startup there is a lot of kinetic energy of enthusiastic innovators looking to launch a product that changes how an industry works.

Operations 286

Operations New York City Technical Review Startup 286

Steve Blank

APRIL 23, 2014

For decades large companies have gone shopping in Silicon Valley for startups. What can companies learn from others’ failed efforts to integrate startups into large companies? The answer - there are two types of integration strategies, and they depend on where the startup is in its lifecycle. The Innovation Portfolio.

Acquisition 332

Acquisition Intellectual Property Silicon Valley Startup 332

Both Sides of the Table

SEPTEMBER 22, 2012

I think I’ve read Paul Graham’s post on “ Startup = Growth ” three or four times now. “The growth of a successful startup usually has three phases: There’s an initial period of slow or no growth while the startup tries to figure out what it’s doing. I talked about some of that here.

Silicon Valley 390

Silicon Valley Venture Capital Startup Technical Review 390

SoCal CTO

SEPTEMBER 27, 2011

I was asked by a reader how much equity he should give out to early employees and to service providers in a very early stage startup. The first few people into a startup are on a spectrum of founder vs. early employee. Suppose further that he's going to cost $60k a year in salary and overhead, x 1.5 = $90k total.

Early Stage 391

Early Stage Equity CTO Hire Sweat Equity 391

Startup Professionals Musings

FEBRUARY 21, 2012

Cash is the fuel of every startup. It continually amazes me how two startups, seemingly comparable in stage and objective, can be so far apart in their burn rate. Here are some recommendations on how to keep the rate low, and help your startup to prosper at the same time: Measure it and manage it. Which would you bet on?

Burn Rate 232

Burn Rate Startup Salary Equity 232

The Startup Magazine

FEBRUARY 21, 2024

As an investor, these experiences have honed my ability to see beyond spreadsheets and valuations, to the core of what makes businesses thrive: the people, the vision, and the relentless pursuit of excellence. Are there new revenue streams you can tap into? It is also the time to take a hard look at your business model.

Technical Review 132

Technical Review Due Diligence Bankruptcy Intellectual Property 132

Startup Professionals Musings

JANUARY 28, 2011

Cash is the fuel of every startup. It continually amazes me how two startups, seemingly comparable in stage and objective, can be so far apart in their burn rate. Here are some principles on how to do that, and help your startup to prosper and live another day: Measure it and manage it. Pay people with equity or future revenue.

Burn Rate 231

Burn Rate Startup Salary Equity 231

Austin Startup

APRIL 25, 2017

Revenue needs to grow 20x, and margins must expand dramatically. I won’t dive into cost structure in this blog post, but let’s think through how Snap could grow revenue 20x. I won’t dive into cost structure in this blog post, but let’s think through how Snap could grow revenue 20x. Let’s look at each figure.

Valuation 48

Valuation Technical Review Forecast Social Network 48

Startup Professionals Musings

SEPTEMBER 20, 2021

Thus entrepreneurs were able to build prototypes and design new products without the traditional huge prototyping cost. I believe the Maker Movement and hardware startups with limited resources are made for each other. Here are some key positives from an entrepreneur perspective: Shorten the time and cost from idea to prototype.

Startup 397

Startup Cofounder Incubator Early Stage 397

Startup Professionals Musings

SEPTEMBER 14, 2016

Cash flow is a basic survival metric for every startup. Yet it always amazes me that I can find two different startups, seemingly working on the same problem, with one having a burn rate several times higher than the other. Things will cost more than you expect. They understand startup realities. You will make mistakes.

Burn Rate 120

Burn Rate Hockey Stick Startup Salary 120

Startup Professionals Musings

MARCH 25, 2023

Some analysts argue that revenue drives growth, while others say user growth drives revenue. Google reached $1B in revenue within five years of incorporation, and now has a market capitalization of over $1 trillion. Long-term stability requires revenue growth and profit. Both have worked. Traditionally, it was simple.

Valuation 235

Valuation Revenue Viral Retention 235

Startup Professionals Musings

AUGUST 31, 2012

Don’t expect them to believe your $100M revenue projection, if you are still waiting for the first revenue dollar. Get a real customer and real revenue. Funding for pre-revenue startups used to be the domain of angel investors, but they have moved up-stage. Only real results count. Attract a well-rounded team.

Intellectual Property 260

Intellectual Property Sweat Equity CTO Hire Fractional CTO 260

Steve Blank

MARCH 12, 2014

We realized that past K-12 Entrepreneurial classes taught students “the lemonade stand” version of how to start a company: 1) come up with an idea, 2) execute the idea, 3) do the accounting (revenue, costs, etc.). Our students first worked with two local startups who agreed to be their clients, on real-problems.

Lean 334

Lean Customer Development Startup Silicon Valley 334

Startup Professionals Musings

AUGUST 25, 2018

The cost of rolling out a business has never been lower – it only takes a few hundred dollars to incorporate a Limited Liability Corp (LLC) online, create your own website, use social media to get attention, and you are in business. In the early Internet days, it would cost a million dollars to get this far.

Technical Cofounder 184

Technical Cofounder Intellectual Property Silicon Valley LLC 184

Startup Professionals Musings

OCTOBER 5, 2014

Cashflow is a basic survival metric for every startup. Yet it always amazes me that I can find two different startups, seemingly working on the same problem, with one having a burn rate several times higher than the other. Things will cost more than you expect. They understand startup realities. You will make mistakes.

Burn Rate 262

Burn Rate Hockey Stick Entrepreneur Salary 262

Startup Professionals Musings

NOVEMBER 26, 2012

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? This is the most concrete valuation element, usually called the asset approach.

Valuation 270

Valuation Pre-Money Valuation NPV Intellectual Property 270

Startup Professionals Musings

JUNE 17, 2011

Don’t expect them to believe your $100M revenue projection, if you are still waiting for the first revenue dollar. Get a real customer and real revenue. Funding for pre-revenue startups used to be the domain of angel investors, but they have moved up-stage. Only real results count. Attract a well-rounded team.

Intellectual Property 253

Intellectual Property Sweat Equity CTO Hire Fractional CTO 253

Startup Professionals Musings

MAY 4, 2016

The number of startups rose in 2015 for the first time in five years, with the largest year-over-year increase in two decades. But for founders who do their homework, the cost of entry is lower and the opportunity is higher than ever. The cost of social media done well is low. Just make sure you can fill in all the details.

Intellectual Property 120

Intellectual Property Startup Angel Groups Social Media 120

VC Cafe

AUGUST 2, 2022

As an early stage investor in the world of gaming and metaverse technology at Remagine Ventures, I find these companies have the potential to set the agenda, become the potential platforms for developers building in this space and future acquirers/consolidators of startups building the next generation of the Internet. Here we go! Epic Games.

IP 206

IP Cofounder Valuation Acquisition 206

Startup Professionals Musings

MARCH 16, 2011

Money to build the business is the number one challenge for most startups. A large percentage of startups never apply to either. You need to explore more common and more productive approaches for getting your startup moving forward. Self-funding is the preferred source of cash for your startup – if you can do it.

Technical Review 233

Technical Review Bootstrapping Startup Venture Capital 233

Startup Professionals Musings

JUNE 26, 2016

Some analysts argue that revenue drives growth, while others say user growth drives revenue. Google reached $1B in revenue within five years of incorporation, and now has a market capitalization of over $400B. Long-term stability requires revenue growth and profit. Both have worked. Traditionally, it was simple.

Revenue 145

Revenue Valuation Startup Viral 145

Startup Professionals Musings

NOVEMBER 22, 2020

One of the biggest myths I have found in the entrepreneur community is that every startup needs one or more outside investors for credibility and success, and perhaps is even entitled to at least one. By using a service such as Onevest , you can also place your startup in the right shop window and let investors come to you.

Stealth 434

Stealth Startup Angel Investor Bootstrapping 434

Startup Professionals Musings

SEPTEMBER 9, 2010

Every early-stage startup should explore this new funding alternative. Venture capital dispensed quarterly to startups continues to decline, down to about $3 billion in the first quarter, which is the lowest level since 1997. Technology costs are plummeting, meaning you can do more with less. Great companies are made, not born.

Technical Review 215

Technical Review Early Stage Venture Capital Startup 215

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

MARCH 14, 2020

Getting investors to trust you with their money is always a challenge, and it’s even more difficult in the early stages, where you don’t have a significant revenue stream, a few customers, or maybe even a product yet. Non-credible funding request or unreasonable valuation. Future unproven projections don’t set today’s valuation.

Due Diligence 308

Due Diligence Intellectual Property Preferred Stock Seed Stage 308

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. Get a real customer and real revenue. Funding for pre-revenue startups used to be the domain of angel investors, but they have moved up-stage. milestones entrepreneur startup funding business'

Intellectual Property 281

Intellectual Property Entrepreneur Sweat Equity CTO Hire 281

Up and Running

SEPTEMBER 19, 2017

Capital investments are like gasoline on a startup business’s metaphorical fire. If you’re like most startup CEOs, your startup has been your personal fiefdom and baby. Background: Justin Klemm’s analytics and website uptime startup, Ghost Inspector , wants to revolutionize the way businesses manage their ecommerce funnels.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Startup Professionals Musings

FEBRUARY 15, 2023

It’s more possible to bootstrap today than a few years ago, as the cost of entry continues to go down. Most new teams are geographically dispersed these days anyway, so paying rent for an office should be differed to later stages when revenue is plentiful. Favor profitability over revenue and user growth.

Equity 349

Equity Hockey Stick Bootstrapping Sweat Equity 349

Startup Professionals Musings

JUNE 26, 2013

Every early-stage startup should explore this new funding alternative. Venture capital dispensed quarterly to startups actually declined again in the first quarter of 2013 to $6.3 VCs are finding that they don’t need the “large” funds of $100M to $500M to support a portfolio, if they focus on early-stage startups.

Angel Investor 231

Angel Investor Entrepreneur Early Stage Silicon Valley 231

David Teten

JANUARY 19, 2021

More and more startups are pursuing Revenue-Based VCs , but “RBI” doesn’t fit everyone. Flexible VC 101: Equity Meets Revenue Share. By tying payments to actual revenues, founders and investors remain aligned around the company’s real-time performance, good or bad. Flexible VC: Revenue -based. Of the Inc.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Both Sides of the Table

FEBRUARY 15, 2016

There is much talk these days that startup valuations have decreased and may continue to do so and that the amount of time it takes to fund raise may take longer. The earlier the round, the less capital you need and the more reasonable your valuation the less time that is needed generally to raise capital.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150