- Rate of acquisition
- Rate of retention
- Rate of monetization
- No one knows about you
- The leaky bucket
- Free-loaders rule
With tens of thousands of new start-ups being created every year, the potential of a company to truly scale and become a large, stand-alone business is more crucial than ever before.
A great product is always the foundation but a clear distribution strategy becomes essential to cut through the noise.
So most early-stage VCs have started to evaluate investment opportunities with an imaginary benchmark in mind: can this company become a $100 million opportunity?
Generally speaking, there are two ways and only two ways to scale a business to hit that $100 million threshold:Your business has a high Life Time Value LTV per user, giving you the freedom to spend a significant amount of money in customer acquisition.
High LTV can usually be found in transactional or subscription businesses.Your business has a high viral co-efficient or perhaps even a network effect that lets you amass users cheaply without worrying too much about the monetization per user or spending money on paid acquisition.
Continue reading: The only 2 ways to build a $100 million business » Version One Ventures.