Steve Blank

APRIL 1, 2020

Your revenue plans are no longer valid. What’s your monthly cash burn at your new low revenue level? The CEO should dial through as many of the largest existing customers to get a firsthand understanding of the magnitude of any revenue shortfall. The ripple effects won’t be obvious at first. External Assessment.

South Korea 333

South Korea Salary Business Model China 333

Steve Blank

APRIL 23, 2014

buy out an entire company for its revenue and profits. These include the product itself, the customer, the distribution channel, revenue model, how to get, keep and grow customers, resources and activities needed to build the business and costs.). If they decide to buy, large companies can: license/acquire intellectual property.

Acquisition 332

Acquisition Intellectual Property Silicon Valley Startup 332

Steve Blank

MARCH 15, 2017

And it was going to mention the two words that marketing needed to live and breathe: revenue and profit. Generate end-user demand (to match our revenue goals). Value price our products to achieve our revenue and margin goals (create high-value). They understood the mission intent was our corporate revenue and profit goals.

Startup 310

Startup PR Public Relations Channel 310

Steve Blank

JUNE 27, 2017

Its employees and investors don’t depend on an existing revenue stream. Every Airbnb rental is a lost night of revenue for hotels that hate it. Corporations using existing business models have people, processes and revenue goals that can’t be changed overnight. None of the renters pay hotel or tourist tax.

Startup 275

Startup New York City Valuation Distribution 275

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. Revenue per customer? Revenue, Gross Margin?

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

Steve Blank

NOVEMBER 1, 2017

At GE the biggest problem in 2017 was major revenue misses in their Power business.) capture the imagination of investors and can focus on revenue and user growth instead of on the bottom line. Almost 20 years after Amazon was launched, it has massive revenue growth and barely has a meaningful profit.

Institutional Investors 233

Institutional Investors Dividend Stock Technical Review 233

Steve Blank

JANUARY 17, 2023

The most successful venture studios are founded by entrepreneurs that have previously built companies with $10+M in revenue and had 100+ employees. While there are no hard-and-fast rules, I advise entrepreneurs to ask these four questions: Is the studio run by a former founder and does it have former founders as full-time employees?

Technical Cofounder 346

Technical Cofounder Intellectual Property Technical Review Incubator 346

Steve Blank

OCTOBER 24, 2016

If the Microsoft board was managing for quarter to quarter or even year to year revenue growth, Ballmer was as good as it gets as a CEO. Apple under Cook has doubled its revenues to $200 billion while doubling profit and tripling the amount of cash it has in the bank (now a quarter of trillion dollars). Lessons Learned.

Azure 120

Azure Business Model Cloud Artificial Inteligence 120

Steve Blank

OCTOBER 24, 2016

If the Microsoft board was managing for quarter to quarter or even year to year revenue growth, Ballmer was as good as it gets as a CEO. Apple under Cook has doubled its revenues to $200 billion while doubling profit and tripling the amount of cash it has in the bank (now a quarter of trillion dollars). Lessons Learned.

Azure 120

Azure Business Model Cloud Artificial Inteligence 120

Steve Blank

NOVEMBER 16, 2009

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? And without revenue how do we know if we achieved product/market fit to exit Customer Validation?” They’re putting money into web services/business – most without early revenue. End of theory.&#

Customer Development 219

Customer Development Web Developer Customer 219

Steve Blank

JULY 30, 2014

their burn rate (the amount of money they’re spending monthly minus any revenue coming in) and. In large companies, the employees are no less smart, but the organization is optimized to deliver repeatable products, revenue and profits. the day they run out of money and have to shut the doors (or get a new round of funding.).

Customer Development 335

Customer Development Design Developer Customer 335

Steve Blank

JANUARY 22, 2014

Today it’s dominated by capital efficient software, web and mobile startups whereas 10 years ago it was dominated by semiconductor and hardware startups that consumed huge amounts of capital before their first dollar in revenue. This is true whether the company is concept stage or ramping revenue. The Bend Experience.

Early Stage 286

Early Stage Silicon Valley Oregon Technical Review 286

Steve Blank

FEBRUARY 13, 2024

Getting it Right Apple’s entry into new markets by creating new product categories – iPods, iPads, iPhones – is unprecedented in the history of the modern corporation – $300 billion (75% of their revenue) is from non-computer hardware.

Search 256

Search Marketing Forecast Burn Rate 256

Steve Blank

MAY 11, 2021

Dozens of outreach programs across the military now offer quick revenue to early-stage companies. Historically, more than 80% of new entrants exit the defense market before they have a chance to see recurring revenue. Is the company prepared to endure revenue gaps? billion in early funding. Recently public enterprise-AI firm C3.ai

Artificial Inteligence 326

Artificial Inteligence Marketing Startup Silicon Valley 326

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 16, 2016

For the first few years, your VCs want you to keep your head down, build the product, find product/market fit and ship to get to some inflection point (revenue, users, etc.). For example, in your industry do companies build value the old fashion way by generating revenue? If so, how is the revenue measured? FDA approvals?

Liquidity Event 120

Liquidity Event Founder Liquidation Preference Venture Capital 120

Steve Blank

NOVEMBER 2, 2009

Sales people cost money, and when they’re not bringing in revenue, their wandering in the woods is time consuming, cash-draining and demoralizing. Scalable: The goal is not to get one customer but many – and to get those customers so each additional customer adds incremental revenue and profit. Lets see why. Something else?

Lean 244

Lean Silicon Valley Startup RSS 244

Steve Blank

APRIL 10, 2019

We slept under the tables, and pulled all-nighters to get to first customer ship, man the booths at trade shows or ship products to make quarterly revenue – all because it was “our” company. It drove the relentless “do whatever it takes” culture of 20 th century Silicon Valley. The End of the High-Commitment/High-Performance Work System?

Stock Options 333

Stock Options Stock Vesting Common Stock 333

Steve Blank

APRIL 12, 2010

In contrast, in a startup following the Customer Development process, this is when the founders realize that something is wrong with the business model (because revenue is not scaling.) In traditional startups this is when the VP of Sales or Marketing gets fired and the finger-pointing starts.

Business Model 332

Business Model Agile Customer Development Startup 332

Steve Blank

NOVEMBER 12, 2019

Some of the speed differences are because commercial companies and academics face Darwinian competitive pressures for revenue or recognition. With Agile development, used by all startups, updates can occur in weeks or sometimes days, or even hours. The very definition of a contractor implies a contract.

Government 308

Government Artificial Inteligence Silicon Valley North Korea 308

Steve Blank

JUNE 23, 2020

Revenue models and forecasts are no longer valid. While there’s agreement that companies need to adapt to changing markets, rapidly find new markets, new customers and new revenue models, the question is how ? Accounts receivables are stretching way out. What tools and methods can a C-suite team use to do so?

Customer 436

Customer Marketing Customer Development Lean 436

Steve Blank

SEPTEMBER 16, 2014

Activities define the unique expertise your company needs to deliver the value proposition, customers, channels, customer relationships and/or revenue. (If “Activities” is where you define the most important things your company must do to make the rest of your business model work. If you’re a startup it’s easy to get confused on this step.

Cofounder 335

Cofounder Founder Intellectual Property Business Model 335

Steve Blank

MAY 19, 2015

I had lunch last week with Tom, the CEO of a startup that was quickly becoming a large company – last year’s revenue was $40M, this year likely to be $80M maybe even $100 million in ad revenue. to drive traffic to their site, which they then turned into ad revenue.

Technical Review 120

Technical Review Salary Early Stage Software Review 120

Steve Blank

AUGUST 29, 2011

93% of startups that scale prematurely never break the $100k revenue per month threshold. In fact: The team size of startups that scale prematurely is 3 times bigger than the consistent startups at the same stage. 74% of high growth Internet startups fail due to premature scaling. Turns out his birthday is in a week, September 7th.

Software Review 292

Software Review Early Stage Technical Review Startup 292

Steve Blank

DECEMBER 9, 2013

Is it a small business that hits $4 million in revenue in four years and $8 million in ten years? And if not, are you Ok with something small? See 2:03 in the video below). Is it a lifestyle business while you’re keeping your other job? Or is it something that can grow to a size that will result in an acquisition or some liquidity event?

Cofounder 325

Cofounder Technical Cofounder Liquidity Event Lean 325

Steve Blank

APRIL 23, 2018

The entrepreneur who founded and grew the largest startup in the world to $10 billion in revenue and got fired is someone you have probably never heard of. A version of this article appeared in the Harvard Business Review. Elon Musk, Alfred Sloan, and entrepreneurship in the automobile industry.

Michigan 268

Michigan Cofounder Stock Forecast 268

Steve Blank

JANUARY 25, 2011

While our revenue is looking good, we can be out of business in two years if we can’t keep up with our customer’s rapid shifts in platforms. The difference between being able to add them now versus a year or more in the future might be the difference between growing revenue and going out of business.

Part-Time VPE 318

Part-Time VPE Agile Engineer Startup 318

Steve Blank

FEBRUARY 11, 2010

Later I realized six salespeople without revenue to match was a proxy for an out of control burn rate that now had the boards serious attention. These “friends and family orders” made the first nine months of their revenue plan. Sales’ is on the hook for making the numbers and things aren’t looking good. Six is a Proxy for Burn Rate.

Burn Rate 248

Burn Rate Silicon Valley Marketing Boston 248

Steve Blank

NOVEMBER 13, 2012

By then, I had become a venture capitalist at Mitsui Sumitomo Insurance and found myself talking to a lot of entrepreneurs who were proclaiming their great technology yet were struggling with little revenue, and claiming they were “crossing the chasm”. Maysee now enjoys hockey stick revenue growth.

Japan 292

Japan Customer Development Developer Customer 292

Steve Blank

FEBRUARY 23, 2013

But with little tolerance for risk, established firms want their new ventures to produce revenue in a predictable way — which only increases the possibility of failure. Blank explains that this is why companies need a portfolio of new business start-ups rather than putting all of their eggs into a limited number of baskets.

Business Model 332

Business Model Technical Review Business Plan Search 332

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

AUGUST 23, 2010

The temptation is to transform the vision of a large market into a solid corporate revenue forecast – before Customer Development even begins. That means you may find that revenue appears later than the plan called for, or that there are no customers or fewer than the plan suggests.

Customer Development 235

Customer Development Developer Customer South America 235

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? The team interviewed another 9 customers and industry experts and attended the Amazon Web Services meetup in San Francisco.

Channel 215

Channel Artificial Inteligence San Francisco Business Model 215

Steve Blank

AUGUST 21, 2013

The course is free to UCSF, Berkeley, and Stanford students; $100 for pre-revenue startups; and $300 for industry. And we recruited a team of world class Venture Capitalists and entrepreneurs to teach and mentor the class including Alan May , Karl Handelsman , Abhas Gupta , and Todd Morrill. – See more here. The syllabus is here.

SBIR 314

SBIR Technical Review Lean Startup 314

Steve Blank

JANUARY 2, 2014

Part 7: Revenue Streams in Life Sciences. Part 4: This Will Save us Years – Customer Discovery in Medical Devices. Part 5: Value proposition and customer segments in Life Sciences. Part 6: Distribution channels in Life Sciences. Part 8: When Customers Make You Smarter : Customer Discovery in Digital Health.

Lean 240

Lean Algorithm Customer Development IP 240

Steve Blank

SEPTEMBER 7, 2009

Instead of a Sales team and organized to sell with a consistent and successful sales roadmap generating revenue, it is a disorganized and unhappy organization burning lots of cash. Because the company based its headcount and expenses on the expectation that the Sales organization will bring in revenue according to plan.

Customer Development 224

Customer Development Developer Customer Silicon Valley 224