Startup Professionals Musings

FEBRUARY 15, 2023

It’s more possible to bootstrap today than a few years ago, as the cost of entry continues to go down. Likewise, too many volunteers and interns will only increase your workload and rework costs. Investors have spread the word that you can’t get “hockey-stick” growth without a large cash infusion.

Equity 349

Equity Hockey Stick Bootstrapping Sweat Equity 349

Startup Professionals Musings

JANUARY 14, 2023

Simply stated, it means that your business has the potential to multiply revenue with minimal incremental cost. A software product is a classic example of a scalable solution, since it costs real money to build the first copy, but unlimited additional copies can be quickly cloned for almost no incremental cost.

Hockey Stick 339

Hockey Stick Intellectual Property Non-Compete Business Model 339

Startup Professionals Musings

SEPTEMBER 14, 2016

Your goal is that magical breakeven point and hockey-stick profit-growth curve. Things will cost more than you expect. If your runway is less than a year, it’s time to either begin looking for a new cash infusion or defining and implementing a Plan B to assure survival. Buffer your projected resource requirements.

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Burn Rate Hockey Stick Startup Salary 120

Startup Professionals Musings

MAY 18, 2020

It’s more possible to bootstrap today than a few years ago, as the cost of entry continues to go down. Likewise, too many volunteers and interns will only increase your workload and rework costs. Investors have spread the word that you can’t get “hockey-stick” growth without a large cash infusion.

Hockey Stick 423

Hockey Stick Bootstrapping Sweat Equity Intellectual Property 423

Startup Professionals Musings

APRIL 19, 2020

Simply stated, it means that your business has the potential to multiply revenue with minimal incremental cost. A software product is a classic example of a scalable solution, since it costs real money to build the first copy, but unlimited additional copies can be quickly cloned for almost no incremental cost.

Hockey Stick 386

Hockey Stick Intellectual Property Startup Non-Compete 386

Startup Professionals Musings

DECEMBER 17, 2022

Every entrepreneur thinks he can relax a bit after his business model is proven, funding is in place, and revenues are scaling as projected up that hockey-stick curve. Marketing costs and time go up, and the growth curve flattens. This S-Curve, with no correction, can quickly lead to disaster.

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Hockey Stick Guerilla Acquisition Startup 265

Up and Running

MARCH 14, 2018

How much will it cost? Your financials should easily allow you to calculate your customer acquisition costs. If your financial chart shows “hockey-stick growth,” be sure to explain what happens to cause those inflection points. This is usually one of the most skipped sections of an investor pitch and a full business plan.

Hockey Stick 164

Hockey Stick Exit Strategy Technical Review Angel Investor 164

Both Sides of the Table

JANUARY 11, 2014

“Growth hacking perpetuates this myth that you can magically achieve hockey-stick growth by using short-term “hacks.” “ I have always encouraged teams to think about growth as daily blocking-and-tackling rather than a dark art. I laughed as I did at much of his rant. He even used some terminology near and dear to my heart.

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Technical Review Hockey Stick SEM Channel 384

Startup Professionals Musings

NOVEMBER 27, 2015

All investors want to see real evidence that the dogs will eat the dogfood before they give any credibility to your hockey-stick projection curves. They are so certain that customers are poised and waiting that they forget the costs of a hard launch -- and the risks of a highly visible failure. Proceed with caution.

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Hockey Stick Startup Stealth Agile 120

Steve Blank

NOVEMBER 13, 2012

Maysee now enjoys hockey stick revenue growth. For example, Maysee , a business card cloud services startup, got out of the building and then developed an MVP, avoiding costly UI development that customers in fact found no need for.

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Japan Customer Development Developer Customer 292

Up and Running

FEBRUARY 12, 2018

Business forecasting is essentially guessing (or predicting, or estimating) future numbers such as future sales, cost of sales, and operating expenses, by month, quarter, year, and so on. Why do entrepreneurs sometimes resort to the “hockey stick forecast,” especially when they pitch to investors?

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Forecast Hockey Stick Angel Investor Sales 114

David Teten

JANUARY 19, 2021

As a result, unfounded hockey-stick graphs and unicorn promises give way to financial fluency, realistic expectations, frank conversations about what a business can credibly achieve, and transparency. . That said, nothing is cost-free. More complex cost of capital calculation. Transaction costs. Cost of capital.

Cofounder 78

Cofounder Technical Review Dividend Equity 78

Up and Running

JANUARY 2, 2013

How much will it cost? Your financials should easily allow you to calculate your customer acquisition costs. If your financial chart shows “hockey-stick growth,” be sure to explain what happens to cause those inflection points. How will you reach your customers? How will you measure success?

Hockey Stick 164

Hockey Stick Exit Strategy Technical Review Due Diligence 164

Startup Professionals Musings

FEBRUARY 26, 2013

Traction is evidence that your product or service has started that “hockey- stick” adoption rate which implies a large market, a valid business model, and sustainable growth. A graph that shows a hockey-stick “up and to the right” curve with at least three data points per key indicator is a great visual assist.

Hockey Stick 266

Hockey Stick Early Stage Metrics Acquisition 266

Up and Running

FEBRUARY 13, 2017

When I asked the standard “How are you,” he answered: “If I see another hockey stick forecast this week, I’m going to throw something at somebody.”. That was so long ago that I had to ask him to explain the hockey stick metaphor. So too, with gross margin, sales less direct costs.

Forecast 130

Forecast Hockey Stick Startup Sales 130

Startup Professionals Musings

SEPTEMBER 7, 2013

Simply stated, it means that your business has the potential to multiply revenue with minimal incremental cost. A software product is a classic example of a scalable solution, since it costs real money to build the first copy, but unlimited additional copies can be quickly cloned for almost no incremental cost.

Hockey Stick 278

Hockey Stick Intellectual Property Startup Non-Compete 278

Startup Professionals Musings

SEPTEMBER 26, 2014

Every entrepreneur thinks he can relax a bit after his business model is proven, funding is in place, and revenues are scaling as projected up that hockey-stick curve. Marketing costs and time go up, and the growth curve flattens. This S-Curve, with no correction, can quickly lead to disaster.

Hockey Stick 263

Hockey Stick Guerilla Acquisition Revenue 263

Startup Professionals Musings

MARCH 3, 2018

Every entrepreneur thinks he can relax a bit after his business model is proven, funding is in place, and revenues are scaling as projected up that hockey-stick curve. Marketing costs and time go up, and the growth curve flattens. This S-Curve, with no correction, can quickly lead to disaster.

Hockey Stick 130

Hockey Stick Guerilla Acquisition Revenue 130

Startup Professionals Musings

APRIL 6, 2016

It’s more possible to bootstrap today than a few years ago, as the cost of entry continues to go down. Likewise, too many volunteers and interns will only increase your workload and rework costs. Investors have spread the word that you can’t get “hockey-stick” growth without a large cash infusion.

Bootstrapping 120

Bootstrapping Hockey Stick Sweat Equity Intellectual Property 120

Up and Running

SEPTEMBER 6, 2018

When you imagine a new business, you think of what it would cost to make the product, what you could sell it for, and what the profits per unit might be. We are trained to think of business as sales minus costs and expenses, which equal profits. Hockey stick” shaped growth projections. We spend cash.

Business Plan 128

Business Plan Hockey Stick Lean Dilution 128

Startup Professionals Musings

FEBRUARY 14, 2016

Simply stated, it means that your business has the potential to multiply revenue with minimal incremental cost. A software product is a classic example of a scalable solution, since it costs real money to build the first copy, but unlimited additional copies can be quickly cloned for almost no incremental cost.

Hockey Stick 120

Hockey Stick Intellectual Property Non-Compete Business Model 120

Startup Professionals Musings

JANUARY 11, 2015

Simply stated, it means that your business has the potential to multiply revenue with minimal incremental cost. A software product is a classic example of a scalable solution, since it costs real money to build the first copy, but unlimited additional copies can be quickly cloned for almost no incremental cost.

Hockey Stick 120

Hockey Stick Intellectual Property Non-Compete Business Model 120

Startup Professionals Musings

NOVEMBER 1, 2015

Every entrepreneur thinks he can relax a bit after his business model is proven, funding is in place, and revenues are scaling as projected up that hockey-stick curve. Marketing costs and time go up, and the growth curve flattens. This S-Curve, with no correction, can quickly lead to disaster.

Hockey Stick 120

Hockey Stick Guerilla Startup Acquisition 120

Reid Hoffman

DECEMBER 10, 2020

For a long time, when you looked at the graph, it was almost like a classic exponential “hockey stick” curve, where it’s flat for a long time, then hits the bend and takes off. However, this course of action would have cost the company something even more important–the trust of its guests and hosts.

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Hosting Hockey Stick IPO Employee 69

thebarefootvc

DECEMBER 16, 2011

Discovery, in contrast to search, took center stage as Pinterest displayed hockey stick growth (and raised VC money near a $200M valuation in late 2011). The viral nature of social media no doubt aided this growth, as did improvements in the online shopping experience. What’s Next in 2012….

Technical Review 110

Technical Review India Mobile Global 110

Berkonomics

MARCH 21, 2019

If the business is not a startup, expect to supply income statements for the past several years as well, to emphasize trends in revenue and costs. Careful about “hockey stick” forecasts. At the least, historical numbers must include the latest income statement and balance sheet, showing activity through the latest period.

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Hockey Stick Liquidity Event Valuation Balance Sheet 63

Startup Lessons Learned

APRIL 14, 2009

They know how much it costs to bring in a customer and they know how much money they can expect to make on each one. This wasn’t very impressive, but we had two things going for us: A hockey stick shaped growth curve. People often forget the most important part of the hockey stick: the long flat part.

Customer 167

Customer San Francisco Lean Hockey Stick 167

Both Sides of the Table

DECEMBER 26, 2010

It is also a great place to emphasize that you think it is important not to just replicate every feature of your competitors but to build your product in a cost-effective way and building to the MVP (minimum viable product). It’s the lie we know you’re telling (along with your hockey stick growth that we sort of accept for some reason.

Hockey Stick 313

Hockey Stick Differentiation AJAX Vertical 313

Gust

NOVEMBER 29, 2011

Hockey stick sales forecasts are cool when they’re based on some justifiable logic. I always look for marketing expenses as a percent of sales, and headcount and personnel costs, and compensation for management. Well said. And to add some specific examples: I hate the high growth rates that aren’t built on detailed assumptions.

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Hockey Stick Forecast Early Stage Finance 70

This is going to be BIG.

JULY 26, 2010

The only concern was that they didn’t know what their cost of customer acquisition was, nor did they which channels would be most effective, or how much they could acquire out of each channel. Although, a number of investors were so enamored with the revenue growth that they weren’t as interested in the cost of continuing up the hockey stick.

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Acquisition Hockey Stick Customer SEM 128

ReadWriteStart

AUGUST 31, 2010

For startups targeting consumers, "investors want to see 'hockey stick' adoption rates which imply consistent or increasing growth rates on a percentage basis," says Davis. The marketing equation is defined as the relationship between the customer lifetime value and the cost of acquisition," says Davis.

Hockey Stick 130

Hockey Stick Startup Curation Vertical 130

Steve Blank

NOVEMBER 8, 2010

Describing your product as “new and “never been done before” instead of “we’re just like those others guys, but better” could cost your company billions. This results in a much slower adoption curve – the classic hockey stick. RIM and TiVo are two examples of getting it right and wrong. Research in Motion (RIM).

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Hockey Stick Customer Development Silicon Valley Networking 271

ConversionXL

FEBRUARY 19, 2016

You get more traffic, more conversions, more money – in an endless hockey stick shaped cycle. SEO brings in free traffic without an exact cost, and CRO converts them. SEO is usually seen as “free traffic,” but the time and cost to get those rankings and traffic can be a lot. Of course, it’s not so simple.

SEO 48

SEO Technical Review Algorithm Software Review 48

This is going to be BIG.

FEBRUARY 15, 2011

Yet, we know very well that the most thoughtfully constructed cashflow models and hockey stick traffic predictions never come out the way we thought they would, so what's the point of making them at all? What will drive your costs? You may be able to drive a ton of traffic and a ton of new customers, but can you keep them?

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Hockey Stick PR Framework Engineer 111

Hippoland

AUGUST 8, 2018

Forget about traction and hockey stick growth. Very simply, your cost to acquire a customer needs to be lower than the value of that customer (lifetime value). Ads can also be cost-per-click or cost-per-action ads. They sell their hardware at cost – say a new refrigerator. This is obvious.

Founder 48

Founder Sales Cycle Affiliate Retention 48

Hippoland

AUGUST 8, 2018

Forget about traction and hockey stick growth. Very simply, your cost to acquire a customer needs to be lower than the value of that customer (lifetime value). Ads can also be cost-per-click or cost-per-action ads. They sell their hardware at cost – say a new refrigerator. This is obvious.

Founder 48

Founder Sales Cycle Affiliate Retention 48

Up and Running

AUGUST 21, 2014

It’s hard to understand how many people will you actually attract, what is it going to cost, what’s your conversion rate, how long will people stay. You’re going to want to really think about how you’re going to drive traffic and what’s most cost effective. Those things are all really hard to just get.

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Metrics Startup Churn Rate Forecast 84