Agile VC

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Revenue = Product Market Fit

Agile VC

This is a logical thing to do… when we started LinkedIn, my mentor Reid Hoffman instilled a mantra of Growth –> Usage –> Revenue which still holds for many consumer companies. Arguably revenue is the best signal of product-market fit for B2B startups. But B2B startups need to take a different tack.

Revenue 234
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The Difference Between Apple & Facebook ? AGILEVC

Agile VC

Both companies generate direct revenue from their platform in the form of a revenue share / platform tax (typically 30%) on software and digital goods sold through the respective platforms. Facebook’s direct platform revenue accounted for about 15% of the company’s overall sales whereas Apple’s was less than 1%.

Java 170
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Lyft S-1: Kicking Off the Decacorn Bonanza of 2019

Agile VC

There are a variety of quick write-ups on the Lyft S-1 for basic figures like annual revenue, rider growth, or who the largest shareholders are. Lyft helpfully provides the number of active riders, total number of rides, and average revenue per rider on a quarterly basis. Here’s one from Pitchbook and one from TechCrunch.

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Groupon's S-1: From Zero to Like? Billions in 30 Months ? AGILEVC

Agile VC

They’ve grown from nothing to >$2B in revenue in 30 months time, making the company among the fastest growing businesses in the histroy of the world. How They Make Money: Groupon keeps a share of the coupon value (typically 40-50%) as its net revenue (1). Financial Snapshot: 2010 Revenue: $713M. to the merchant.

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Alibaba S-1: How Well Do They Monetize?

Agile VC

Unfortunately Alibaba doesn’t actually break out revenue by marketplace or business unit. There are no commissions on closed sales (other than Taobaoke) or placement fees on Taobao. based on product category for all sales settled through Alipay (~80% of Alibaba’s GMV is settled through Alipay).

China 159
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Slack S-1: Will APRU Drive Long Term Value?

Agile VC

One of the key questions for me was how might Slack stack up against other great SaaS companies when it comes to average revenue per user (ARPU), and how ARPU and total addressable market (TAM) might drive Slack’s long run market cap. Slack’s net dollar retention rate is an incredibly impressive 143%. So Slack generated $1.43

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What TAM Really Means

Agile VC

VCs invest in disruptive startups that have the potential to build large ($100M+ revenue, enterprise value of hundreds of millions to billions) and durable businesses. A marketplace’s true revenue potential is the % of the total GMS (gross merchandise sales) they can charge (typically 5-10%), not the total GMS.

B2B 246