Both Sides of the Table

NOVEMBER 3, 2009

Let’s take your revenue line. It should talk about how many customers you think you will acquire and how much you’ll charge for your product. Do you really want to spent $100k building a product to discover through Customer Development that the market is too small? Or lower revenue assumptions.

Business Plan 334

Business Plan AJAX Venture Capital Technical Review 334

Startup Professionals Musings

FEBRUARY 17, 2021

It wasn’t so many years ago that starting a new e-commerce business on the Internet was a complex custom development project, usually costing a million dollars or more. With a little help from a friend, you can handle expenses, revenue, and payroll, with QuickBooks or a similar package.

Cost 405

Cost Entrepreneur Burn Rate Social Media 405

Steve Blank

FEBRUARY 16, 2010

In my last post I described what happened when a company prematurely scales sales and marketing before adequately testing its hypotheses in Customer Discovery. You would think that would be enough to get wrong, but entrepreneurs and investors compound this problem by assuming that all startups grow and scale by executing the Revenue Plan.

Revenue 230

Revenue Balance Sheet Hockey Stick Burn Rate 230

Steve Blank

NOVEMBER 18, 2010

For decades startups were managed by pretending the company would follow a predictable path (revenue plan, scale, etc.) In fact, for decades if you drew this diagram on day one of a startup VC’s would nod sagely and everyone would get to work heading to first customer ship. The Revenue Plan – The Third Fatal Assumption.

Burn Rate 247

Burn Rate Management Business Model Customer Development 247

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. As a founder you are testing a series of hypotheses about all the pieces of the business model: Who are the customers/users? If you are following Customer Development , the answer is easy.

Balance Sheet 298

Balance Sheet Startup Burn Rate Metrics 298

Startup Professionals Musings

JULY 27, 2014

It wasn’t so many years ago that starting a new e-commerce business on the Internet was a complex custom development project, usually costing a million dollars or more. With a little help from a friend, you can handle expenses, revenue, and payroll, with QuickBooks or a similar package.

Entrepreneur 260

Entrepreneur Burn Rate Social Media LLC 260

Steve Blank

AUGUST 27, 2012

It was great to watch him embrace the spirit and practice of customer development. He was constantly in front of customers, listening, selling, installing and learning. Other weeks Yuri would be buffeted by the realities of his burn rate, declining bank account and depressing comments from customers.

Founder 316

Founder Cofounder Advisory Board Burn Rate 316

VC Cafe

JULY 26, 2020

In fact, they were screaming at them to dramatically reduce their burn rates. In a capital scarce environment following the Dot Com crash, startups needed to do more with less and survive long enough to generate revenue. It was a nuclear winter for startup capital.” ” Steve Blank, “Is the lean startup dead?”

Lean 214

Lean Seed Capital Startup Burn Rate 214

Steve Blank

NOVEMBER 2, 2009

For those of you who have been following the discussion, a Lean Startup is Eric Ries ’s description of the intersection of Customer Development , Agile Development and if available, open platforms and open source. And I can even imagine cases where it might burn more cash than a traditional startup. Lets see why.

Lean 244

Lean Silicon Valley Startup RSS 244

Startup Lessons Learned

MARCH 27, 2009

The full formula works like this: runway = cash on hand / burn rate # iterations = runway / speed of each iteration Very few successful companies ended up in the same exact business that the founders thought theyd be in (see Founders at Work for dozens of examples). The key is to be able to refute as many major hypotheses as you can.

San Francisco 117

San Francisco Lean Continuous Deployment DC 117