VC Cafe

FEBRUARY 27, 2024

A founder asked me what makes a $2M round “pre-seed”? especially if the startup already has a product and revenue? Seed is about showing initial product market fit. Not only the bar for seed rounds has gotten higher (as less seed rounds get done) but also the founders prefer to build their company based on milestones.

Valuation 186

Valuation Software Review Generative AI Technical Review 186

David Teten

AUGUST 20, 2019

A new wave of Revenue-Based Investors are emerging who are using creative investing structures with some of the upside of traditional VC, but some of the downside protection of debt. I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital.

Revenue 60

Revenue Cofounder Founder Venture Capital 60

VC Cafe

MARCH 1, 2024

Most startups equate the process of fundraising to dating – founders have to typically kiss a lot of frogs until the find the right fit. Eliminating middlemen in healthcare – from using AI to automate repetitive human jobs to exploring new and better business models for providing care.

Artificial Inteligence 176

Artificial Inteligence Technical Review Software Review Generative AI 176

Duct Tape Marketing

JANUARY 4, 2024

Our deep dive into the world of email newsletters unveils tactical strategies for transforming subscribers into revenue-generating assets. As the founder of The Clikk, Russell has witnessed the evolving landscape of newsletters, recognizing them as a powerful intersection of content marketing and direct response promotion.

Revenue 78

Revenue Advertising Email ChatGPT 78

Steve Blank

APRIL 12, 2010

He took a deep breath, looked around the boardroom table and then proceeded to outline a radical reconfiguration of the product line (repackaging the products rather than reengineering them) and a change in sales strategy, focusing on a different customer segment. The Search for the Business Model.

Business Model 332

Business Model Agile Customer Development Startup 332

ReadWriteStart

OCTOBER 2, 2023

They poured their hearts and souls into creating an innovative product fueled by the desire to make a difference in the lives of their target audience. It’s disheartening, but sadly, this is one experience that many startup founders face. I understand the struggles that come with being a startup founder.

Design 105

Design Product Churn Rate Architecture 105

YoungUpstarts

OCTOBER 19, 2017

by Steve Owens, Founder and CTO of Finish Line Product Development Services. The lean start-up movement has been based on a single insight – which the purpose of a start-up is to discover a business model that works. Reducing product turn time. Start-ups are very different from established businesses.

Product Development 153

Product Development Lean Developer Product 153

Both Sides of the Table

JANUARY 4, 2014

I think as a tech industry we have bred a culture that places more emphasis on product excellence than managing human behavior. Of course it makes no sense to have great people management and a crappy product. ” Of course we all go into businesses expecting to be aligned with our co-founders but over time life changes.

Founder 340

Founder Sacramento Cofounder Technical Review 340

David Teten

JANUARY 21, 2021

This essay is part of a series on alternative VC: I: Revenue-Based Investing: a new option for founders who care about control. II: Who are the major Revenue-Based Investing VCs? III: Why are Revenue-Based VCs investing in so many women and underrepresented founders? Revenue-Based Flexible VCs.

Equity 78

Equity Revenue Cofounder Colorado 78

VC Cafe

FEBRUARY 21, 2023

This is a question startup founders ask themselves multiple times a week. It’s not just the competition against the incumbents and the large tech platforms that founders has to worry about, but most importantly is the company’s performance and product market fit. How are we doing?

Retention 109

Retention Conversion Churn Rate B2C 109

David Teten

AUGUST 19, 2019

So you’re interested in raising capital from a Revenue-Based Investor VC. A new wave of Revenue-Based Investors (“RBI”) are emerging. I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital. We have a special program if you are pre-seed and need product development.

Revenue 60

Revenue Technical Review Software Review Equity 60

Startup Professionals Musings

APRIL 14, 2021

For example, my dictate that entrepreneurs need to find a “ painful ” problem to solve (such as high cost, low productivity) to attract customers, doesn’t really account for many successful startup businesses today, including top social media platforms, dating sites, and new fashions.

Customer 432

Customer Social Media Dividend Technical Review 432

Steve Blank

SEPTEMBER 5, 2018

Reading the NY Times article “ Jeffrey Katzenberg Raises $1 Billion for Short-Form Video Venture, ” I realized it was time for a new startup heuristic: the amount of customer discovery and product-market fit you need to find is inversely proportional to the amount and availability of risk capital. ” Fire, Ready, Aim.

Lean 335

Lean Burn Rate Startup IPO 335

The Startup Magazine

AUGUST 11, 2023

It is necessary to cover the early stages of product development, thorough market research, and other processes during the initial step. Seed capital is a component of the initial investments made in young businesses. The criteria change after a company reaches the growth stage when it is deemed to have attained product market fit.

Seed Stage 126

Seed Stage Technical Review Early Stage Due Diligence 126

SoCal CTO

MARCH 5, 2007

However, Elgg could power 100,000 networks and it would make no difference - there is no revenue stream as we give everything away under a GPL license. There are quite a few other Software Development Companies in Southern California working on open source and/or freemium business models. I understand his frustration.

Open Source 150

Open Source Business Model Technical Cofounder Southern California 150

Steve Blank

APRIL 23, 2014

Most large companies manage three types of innovation: process innovation (making existing products incrementally better), continuous innovation (building on the strength of the company’s current business model but creating new elements) and disruptive innovation (creating products or services that did not exist before.).

Acquisition 332

Acquisition Intellectual Property Silicon Valley Startup 332

Startup Professionals Musings

MAY 15, 2019

Steve Blank via Flickr by jdlasica I see more and more entrepreneurs who seem to have everything going for them – vision, motivation, passion, even a good business plan, product, and money, and yet they can’t close customers. Nail the business model. Process myth: Why building a product leads to failure.

Startup 245

Startup Angel Investor Technical Review Incubator 245

A Smart Bear: Startups and Marketing for Geeks

OCTOBER 17, 2011

Cancellation rate] = [product utility] + [service quality] + [acceptable price]. I’ve never seen a graph of “usefulness of the product.”) “LTV” means “the total revenue you’ll get from a customer over its lifetime.” So total expected revenue is $RN/ p.

Business Model 245

Business Model Metrics Engineer Technical Review 245

YoungUpstarts

AUGUST 24, 2017

by Stefan Pretty, founder of Subbly. Subscription business models have been around for a pretty long time, but thanks to modern technology, this model has evolved from milk or newspapers delivery to a versatile eCommerce experience. Subscription business brings recurring revenue. Conclusion.

Churn Rate 149

Churn Rate eCommerce Business Model Bootstrapping 149

VC Cafe

OCTOBER 23, 2022

The CEO shared the revenue target for the year at X, and the revenue target for next year at 3X. The discussion that ensued was insightful and I thought it would be worth sharing it here for founders who are dealing with a similar issue. One of the board members asked a simple question: “Why is revenue our North Star KPI?

Metrics 179

Metrics Revenue B2C Portfolio 179

Version One Ventures

SEPTEMBER 12, 2023

The most powerful disruptions occur when a technology disruption and a business model disruption go hand in hand. This ‘double disruption’ forces incumbents to get up to speed with a new technology and a new business model at the same time. It was suddenly free for consumers to access content and software products.

Business Model 127

Business Model Technology Differentiation Software 127

Steve Blank

MARCH 16, 2016

To most founders a startup is not a job, but a calling. But startups require money upfront for product development and later to scale. Founders can now access the largest pool of risk capital that ever existed –in the form of Private Equity (Angel Investors, family offices , Venture Capitalists (VC’s) and Hedge Funds.). (BTW,

Liquidity Event 120

Liquidity Event Founder Liquidation Preference Venture Capital 120

The Next Web

SEPTEMBER 22, 2013

While you are working away on your business plan, looking for ways to raise capital, finding the right people to hire, etc., But have you ever had the opportunity to pick the brains of founders who created amazingly successful startups and companies like Envato , Backblaze , Simple , or Treehouse ? Things snowballed from there.”.

Cofounder 164

Cofounder Founder Startup Bootstrapping 164

Both Sides of the Table

JUNE 4, 2013

I recommend you read Fred Wilson’s recent blog post about the need for a well articulated business strategy before pushing a particular business model. He then brought her to board meetings so nobody could accuse him of not having a business model. You need to first create a compelling product.

Technical Review 401

Technical Review Startup Business Model Non-Compete 401

View from Seed

JUNE 23, 2022

Founder: Dennis Chim. “Creators don’t want to just refer traffic towards random products to make money, but rather prefer to directly sell products which they truly believe in. Influencer Direct puts the tools to create their own eCommerce business directly into the hands of influencers.” And your least?

DC 156

DC Cambodia eCommerce Social Media 156

Steve Blank

APRIL 26, 2022

Most existing investors (those still in business) hoarded their money and stopped doing follow-on rounds until the rubble had cleared. Except, that is, for the bottom feeders of the Venture Capital business – investors who “ cram down ” their companies. W hy would any founder agree to this? Why do VCs Do This? You Have a Choice.

Cram Down 404

Cram Down Founder Venture Capital Recapitalization 404

Startup Professionals Musings

JANUARY 22, 2021

How do you convince investors that your business model will really work, before you have a revenue stream that exceeds your expenses? Even if you are bootstrapping your business, and you are the only investor, you should be asking yourself the same question. Plan for a real revenue model.

Business Model 414

Business Model Angel Investor Bootstrapping Revenue 414

The Startup Magazine

FEBRUARY 21, 2024

Arif Bhalwani is the co-founder and CEO of Third Eye Capital (TEC) in Toronto, Canada. The goal is to transform dormant or underutilized assets into active capital that supports your business. It is also the time to take a hard look at your business model. Are there new revenue streams you can tap into?

Technical Review 134

Technical Review Due Diligence Bankruptcy Intellectual Property 134

Startup Professionals Musings

JANUARY 28, 2015

New entrepreneurs tend to focus only on getting the product right, and assume that the right culture and ethics will come later simply by hiring good people. Building an ethical business is more than just compliance and meeting legal requirements, and it has big paybacks. business culture entrepreneur ethics myths startup'

Founder 120

Founder Software Review Offshore Startup 120

VC Cafe

NOVEMBER 2, 2019

Benchmarks are typically specific to stage/business model/geo. In Rob Go’s words: For seed and Series A deals, investors will also need to see a high-potential team with founder/market fit , a large and attractive market opportunity , and a business model with increasing returns to scale.

B2C 141

B2C Technical Review Startup Retention 141

VC Cafe

MARCH 4, 2024

With NVIDIA’s Israel-1 AI supercomputer, a broad range of innovative companies in Israel will create AI that can transform the productivity and business models of enterprises around the world.” manufacturing facilities as part of a multi-year roadmap to support domestic EV battery production. The list goes on and on.

Technical Review 78

Technical Review Cofounder Venture Capital 78

YoungUpstarts

JUNE 4, 2019

At Wildcat, we recommend benchmarking your startup against the four core architectural pillars of the Traction Gap Framework: product , revenue , team and systems. Product Architecture. A well-developed product architecture helps a startup to achieve rapid market/product fit by successfully appealing to customers (users).

Framework 127

Framework Architecture Cleveland Early Stage 127

Steve Blank

MAY 9, 2017

And to today, when its major product is simply innovation. When the product and channel are bits, adoption by 10’s and 100’s of millions and even billions of users can happen in years versus decades. The second thing that’s changed is that we’re now Compressing the Product Development Cycle.

Restful 222

Restful Silicon Valley Puerto Rico San Jose 222

Steve Blank

APRIL 23, 2018

A version of this article appeared in the Harvard Business Review. 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. Think of the iPhone and its yearly new models.). What Does GM Have to Do with Tesla And Elon Musk?

Michigan 268

Michigan Cofounder Stock Forecast 268

Steve Blank

FEBRUARY 26, 2020

Every year I teach classrooms full of students who leave class understanding the basics of how to search for product/market fit—and thinking their next goal is to “get funded.”. You (think) you have product-market fit with real customers and real revenue and need money to grow and expand. That’s a mistake.

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

View from Seed

SEPTEMBER 18, 2019

As a seed-stage company, it is understandable to have a nascent (or non-existent) product and a barebone team relative to the great ambition of the company. The “product roadmap”. The other aspect of the people roadmap is org-level team building necessary to unlock or accompany certain stages of the business.

Part-Time VPE 195

Part-Time VPE Seed Stage CTO Hire Forecast 195

Startup Professionals Musings

JANUARY 18, 2014

I see more and more entrepreneurs who seem to have everything going for them – vision, motivation, passion, even a good business plan, product, and money, and yet they can’t close customers. Nail the business model. Leverage your customer conversations to predict and validate your business model.

Entrepreneur 283

Entrepreneur Startup Angel Investor Technical Review 283