Steve Blank

AUGUST 21, 2013

Obviously there’s lots of bias built into the data – those who volunteered might be the better teams, the peer reviewers might be selecting for what we taught, funding is no metric for successful science let alone successful companies, etc. – but the difference in funding success is over 300%. – See more here.

SBIR 314

SBIR Technical Review Lean Startup 314

Steve Blank

DECEMBER 17, 2009

Web startups are at real disadvantage here as founders may confuse web metrics, A/B testing and on-line surveys as the entirety of first-hand knowledge – for most web business models they are not. Metrics tell you that something is happening. Of course you need to collect metrics, do A/B testing and run online surveys.

Metrics 239

Metrics Customer Customer Development Lean 239

Steve Blank

MARCH 17, 2020

Next, take a look at your actual revenue each month – not forecast, but real revenue coming in each month. Subtract your monthly gross burn rate from your monthly revenue to get your net burn rate. All your assumptions about customers, sales cycle and most importantly, revenue, burn rate and runway are no longer true.

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

Steve Blank

MARCH 4, 2014

They measure their success on metrics that reflect success in execution, and they reward execution. These metrics stack the deck against a company that wants to invest in long-term innovation.). Our Investment Readiness Level is just one of those metrics.) Corporate KPI’s, Policy and Procedures: Innovation Killers.

IRR 335

IRR Startup Business Model Agile 335

Steve Blank

FEBRUARY 25, 2014

The Power of the Investment Readiness Level: Different Metrics for Different Industry Segments. To understand the power of this tool, look at how the VC overseeing each market segment modified the Investment Readiness Level so that it reflected metrics relevant to their particular industry. Or watch the video here.). Medical Devices.

Incubator 310

Incubator Intellectual Property Startup Lean 310

Steve Blank

APRIL 21, 2011

The Week 6 Lecture: Revenue Model. This week’s lecture covered the Revenue Model including questions like these: How does your company make money? What types of revenue streams are there? Our assignment for the teams for next week: What are the key financials metrics for your business model?

Channel 215

Channel Artificial Inteligence San Francisco Business Model 215

Steve Blank

APRIL 9, 2009

And it was going to mention the two words that SuperMac marketing needed to live and breathe: revenue and profit. And the results weren’t the traditional PR metrics of number of articles or inches of ink. We were constantly creating metrics to see the effects of different PR messages, channels and audiences on end-user purchases.

Silicon Valley 259

Silicon Valley Technical Review RSS PR 259

Steve Blank

FEBRUARY 22, 2010

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. An early indication that you’ve found the right business model is when you believe the cost of getting customers will be less than the revenues the customers will generate. Startup Metrics.

Balance Sheet 298

Balance Sheet Startup Burn Rate Metrics 298

Steve Blank

SEPTEMBER 7, 2016

Actually startup would be a misnomer as Rahul had built a great company, now over $50M in annual revenue with hundreds of employees. Use Mission and Intent to create those definitions and the appropriate metrics for measuring them. Create the appropriate metrics for each employee to match mission. Publish and communicate widely.

Metrics 220

Metrics Employee Revenue Matching 220

Steve Blank

SEPTEMBER 14, 2009

Five Quarters of Profitability During the 1980’s and through the mid 1990’s startups going public had to do something that most companies today never heard of – they had to show a track record of increasing revenue and consistent profitability. There was now a public market for companies with no revenue, no profit and big claims.

Silicon Valley 217

Silicon Valley IPO Technical Review Venture Capital 217

Steve Blank

MAY 14, 2012

Financial progress is tracked using metrics like income statement, balance sheet, and cash flow. The problem is, none of these metrics are very useful because they don’t track progress against your start-up’s only goal: to find a repeatable and scalable business model. .

Balance Sheet 335

Balance Sheet Business Model Customer Development Metrics 335

Steve Blank

FEBRUARY 23, 2016

In other words, how can we adapt the Business Model Canvas when the metrics of success for an organization is not revenue? From Revenue Streams to Mission Achievement. For these organizations, the canvas box labeled Revenue Streams doesn’t make sense. Revenue Streams changes to Mission Achievement. Lessons Learned.

Business Model 120

Business Model Revenue Channel Community 120

Steve Blank

MARCH 11, 2015

And worse, even if someone does manage to start something new, our management structure has so many financial, legal and HR hurdles that every initiative needs to match our existing business financial metrics, processes and procedures. They’ve figured out the revenue model (subscription, license, direct sale, etc.) Lessons Learned.

Widget 120

Widget Lean Business Model Metrics 120

Steve Blank

JUNE 23, 2016

As a consequence, corporations used metrics like return on net assets (RONA), return on capital deployed, and internal rate of return (IRR) to measure efficiency. These metrics make it difficult for a company that wants to invest in long-term innovation. They knew how to execute the current business model.

Architecture 227

Architecture IRR Balance Sheet Liquidity Event 227

Steve Blank

SEPTEMBER 7, 2016

Actually startup would be a misnomer as Rahul had built a great company, now over $50M in annual revenue with hundreds of employees. Use Mission and Intent to create those definitions and the appropriate metrics for measuring them. Create the appropriate metrics for each employee to match mission. Publish and communicate widely.

Metrics 120

Metrics Employee Revenue Matching 120

Steve Blank

NOVEMBER 21, 2016

Customers, for example, are recast as “beneficiaries,” and instead of identifying revenue streams, these diplo-preneurs are interested in defining “mission achievement.”). The student teams have learned tons about how the State Department is organized and how it works (or doesn’t).

Silicon Valley 120

Silicon Valley Washington United Kingdom Lean 120

Steve Blank

NOVEMBER 21, 2016

Customers, for example, are recast as “beneficiaries,” and instead of identifying revenue streams, these diplo-preneurs are interested in defining “mission achievement.”). The student teams have learned tons about how the State Department is organized and how it works (or doesn’t).

Silicon Valley 120

Silicon Valley Washington United Kingdom Lean 120

Steve Blank

MAY 16, 2016

They have to change the metrics across the entire organization. If not, then the effectiveness of the Horizon 3 effort will be graded using Horizon 1 metrics. In a company you know you’ve been successful when you generate revenue and profit. But in the military success has different metrics. Now back to the class. .

San Diego 142

San Diego Metrics Indonesia Silicon Valley 142

Steve Blank

JANUARY 25, 2010

Or depending on your metrics for success, get users, grow traffic, etc.). When revenue, users, traffic, etc., The goal of your early business model can be revenue, or profits, or users, or click-throughs – whatever you and your investors have agreed upon. How do you know your business model is the right one?

Agile 335

Agile Startup Silicon Valley Business Model 335

Steve Blank

DECEMBER 7, 2010

Dave McClure, “Startup Metrics for Pirates”, [link]. Channel incentives – does your product or proposition extend or replace existing revenue for the channel? ——————– Class 6 Feb 8 th Testing Revenue Model. Class Lecture/Out of the Building Assignment: What’s a revenue model?

Wiki 311

Wiki Lean Management Business Model 311

Steve Blank

AUGUST 18, 2010

Focus on revenue from day one. It’s the only reliable metric for success. Temptation to focus on growth and worry about revenue later. Making revenue your first priority does so many good things for you as an entrepreneur – saves cash, validates customers, and tells you if you have a real business. Fail Fast and Move On.

Customer Development 230

Customer Development Developer Customer California 230

Steve Blank

JANUARY 10, 2011

The revenue plan had the new product baked into the numbers and it was clear that this division General Manager was going to crater his forecast (happens all the time, nothing new here.) The first time I saw a corporate cover-up was as a new board member of a medium size public company.

Forecast 264

Forecast Agile Revenue Founder 264

Steve Blank

JULY 30, 2009

A year goes by, you miss your revenue plan, and you’ve burned through your first VP of Sales. The notion of “Market Type&# is there so startups have a metric of when to spend marketing and sales dollars. Your board nods sagely at your target customer list. What happened?

Silicon Valley 131

Silicon Valley RSS California Customer Development 131

Steve Blank

JUNE 15, 2010

For a founder there’s nothing worse than searching for a business model day after day and then sitting in a board meeting with a VC who asks about some detail of year 5 of your revenue plan. Do they have metrics and a methodology they use for early stage companies that differs from companies that have already found a business model?

Founder 231

Founder Vesting Later Stage Early Stage 231

Steve Blank

MAY 3, 2011

Last week the teams tested their Revenue Models hypotheses: what are customers willing to pay for? Their initial customer segment were upwardly mobile professionals with $2-10K discretionary purchases/year (excluding travel,) and their revenue model was affiliate program fees. All the teams have crossed the Rubicon. .

South Dakota 217

South Dakota Business Model Lean United States 217

Steve Blank

APRIL 30, 2009

And the final lesson was that we were keeping score on our packaging with the wrong metrics – it wasn’t about awards, it was about sales in the retail channel. We had been outsourcing an important part of our demand creation strategy – packaging – to an outside agency without having the expertise to judge or manage the results.

Sales 120

Sales Silicon Valley RSS Las Vegas 120

Steve Blank

JULY 19, 2010

The goal of your business model can be revenue, or profits, or users, or click-throughs (or even just to get the technology into production) – whatever the founders and their investors have agreed upon. Specifying what the metrics are for a repeatable business model is what the board and founders should be doing in the first place.

Vesting 251

Vesting Liquidity Event Venture Capital Founder Vesting 251

Steve Blank

OCTOBER 24, 2017

— Unremarked and unheralded, the balance of power between startup CEOs and their investors has radically changed: IPOs/M&A without a profit (or at times revenue) have become the norm. Typically, this caliber of bankers wouldn’t talk to you unless your company had five profitable quarters of increasing revenue.

Founder 245

Founder Technical Review CTO Hire IPO 245

Steve Blank

FEBRUARY 26, 2020

There are two reasons to raise money: You have a killer idea that is only partially validated, that you think can get to $50M+ of revenue in 5 years with 80%+ gross margins (if margins are lower, you need a lot more revenue)and you need money to get to product-market fit, or. Not all startups need outside investment to grow.

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

Steve Blank

APRIL 22, 2009

Corner Cases and Consensus are For Large Companies Carefully considering each and every possible outcome before you proceed with a decision is something large companies with large revenues, shareholders and employees need to do. Unlike large corporations, startup meetings are not about achieving consensus for every objection raised.

Silicon Valley 176

Silicon Valley RSS California Customer Development 176

Steve Blank

SEPTEMBER 10, 2009

Most startups following the Product Development Model never achieve their revenue plan and burn through a ton of cash not knowing what hit them. After twelve months Handspring’s revenue was $170 million. They never understood Market Type. Why does Market Type matter? End result? What do you think?

Customer Development 196

Customer Development Developer Customer Silicon Valley 196

Steve Blank

NOVEMBER 25, 2013

Investors sitting through Incubator or Accelerator demo days have three metrics to judge fledgling startups – 1) great looking product demos, 2) compelling PowerPoint slides, and 3) a world-class team. And we can offer investors metrics to play Moneyball – with the Investment Readiness Level. We think we can do better. Here’s how.

Oakland 326

Oakland Incubator Lean Metrics 326

Steve Blank

NOVEMBER 5, 2009

A Progress Graph on the right visually shows how far you’ve come (in whatever units of goodness you’re tracking – revenue, units, users, etc.) Good if you have your own money, better if the cash comes from investors, but best if it’s revenues from customers. Did the VC’s like your team ? Get back up and running.

Customer Development 262

Customer Development Developer Customer Silicon Valley 262

Steve Blank

MARCH 17, 2015

Sprocket had world-class resources and capabilities in brand, supply chain, distribution, sales force, financial metrics, all tailored to execute the existing business model , not to help search for a new one. Or finance, who insisted on measuring the success of new ventures on their first year’s revenue and gross margin.

Lean 120

Lean Metrics Business Model Distribution 120

Steve Blank

JUNE 5, 2018

This process emphasizes rapid learning cycles with speed, urgency, accepting failure as learning, and innovation metrics. to their colleagues and bosses who are rewarded on execution-based metrics. An operating group can be a corporate profit and loss center or anything that affects revenue, profit, users, market share, etc.

Programming 320

Programming Incubator Leadership Silicon Valley 320

Steve Blank

SEPTEMBER 19, 2017

Or finance, who insisted on measuring the success of new ventures on their first year’s revenue and gross margin. We agreed that the goal was not to change any of the existing execution processes, procedures, incentives, metrics but rather to work with all the organizations to write new ones for innovation projects.

Finance 226

Finance Lean Metrics Programming 226

Steve Blank

NOVEMBER 7, 2013

What CEOs, management teams and shareholders care about is growth —revenue growth, greater user adoption, increased market share, bigger margins, etc. Using an alternative process including different systems and metrics is key. Here’s how he’s shaping the future of corporate innovation. to find, attract and retain “starters.”.

Lean 326

Lean Nepal Cofounder Customer Development 326