Revenue SEM Valuation Viral 
Startup Lessons Learned
SEPTEMBER 22, 2008
is an elegant way to model any service-oriented business: Acquisition Activation Retention Referral Revenue We used a very similar scheme at IMVU, although we werent lucky enough to have started with this framework, and so had to derive a lot of it ourselves via trial and error. But its not really viral growth, even when its exponential.
www.forentrepreneurs.com
FEBRUARY 2, 2010
As I ask questions to understand the thinking, what usually comes out is something vague along the lines of web marketing, and/or viral growth with no numbers attached. A quick look around all the B2C startups shows that, although viral growth is often hoped for, in reality it is extremely rare.
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Cracking the Code
NOVEMBER 10, 2009
Cloud accounting is all about matching revenue and costs to consumption…well, except for professional services! Your caution in Law 6 about over-estimating the impact of SEM and other lead-generation activity is particularly astute. Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation.
Cracking the Code
OCTOBER 10, 2008
Be prepared to cross the desert - SaaS requires R&D and sales expense up front for a multi-year stream of revenue, so it demands enough investment capital to fund 4+ years of runway. Farming is also often overlooked, but can help grow customer accounts and revenues from 30% upwards (if successful). Great list! Philippe Botteri.
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