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3 startup metrics to know if you want a $100 million business

September 19, 2012 in Business Model, Finance with 1 Comment

What’s important when building a start-up?

 

3 most important metrics in the value chain for startups:
  1. Rate of acquisition
  2. Rate of retention
  3. Rate of monetization
A break in the chain of anyone of these will screw-up the business. e.g. it’s no good acquiring and monetization loads of users unless you can retain them; if you’re a low priced consumer app, it’s no good monetization and retaining 100% of your users if you are not acquiring enough in the first place.

 

Rewriting the three metrics in lay terms, a bad business would be:
  1. No one knows about you
  2. The leaky bucket
  3. Free-loaders rule
This article digs deeper and hits the nail on the head…

 
 

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.

Startup Economics – SmartAsset.com

September 19, 2012 in Entrepreneur, Finance with 0 Comments

This is a useful website. I assumed the following and the site worked out how much stock / value everyone cashes out with with a sale of $20,000,000:

Starting and funding a company is complicated business. This interactive infographic, by SmartAsset.com, helps you understand how different funding events will affect you and your investors over time, and at exit. You can also specify different co-founder share allocations and add Employee or Advisor shares.

Try It out for free  Startup Economics – SmartAsset.com.

Growth Hacker is the new VP Marketing

September 4, 2012 in Leadership & Management with 0 Comments

It’s always good when new terms rise up to describe old things. Here’s the latest….(curated article) – Phil

The rise of the Growth HackerThe new job title of “Growth Hacker” is integrating itself into Silicon Valley’s culture, emphasizing that coding and technical chops are now an essential part of being a great marketer. Growth hackers are a hybrid of marketer and coder, one who looks at the traditional question of “How do I get customers for my product?” and answers with A/B tests, landing pages, viral factor, email deliverability, and Open Graph.

On top of this, they layer the discipline of direct marketing, with its emphasis on quantitative measurement, scenario modeling via spreadsheets, and a lot of database queries. If a startup is pre-product/market fit, growth hackers can make sure virality is embedded at the core of a product.

After product/market fit, they can help run up the score on what’s already working.This isn’t just a single role – the entire marketing team is being disrupted. Rather than a VP of Marketing with a bunch of non-technical marketers reporting to them, instead growth hackers are engineers leading teams of engineers.

Continue Reading Growth Hacker is the new VP Marketing | @andrewchen.

The Cooper Journal: The best interface is no interface

August 30, 2012 in Innovation, Just Cool with 0 Comments

Curated article: A great take on user interfaces and how less is more..

 The best interface is no interface

 

Then, in 1984, Apple adopted Xerox PARC’s WIMP — window, icon, menu, pointer — and took us a galactic leap forward away from those horrifying command lines of DOS, and into a world of graphical user interfaces.

 

Read Full Article: The Cooper Journal: The best interface is no interface.

Re: Defining the Series A

August 28, 2012 in Finance, Startup News with 0 Comments

It’s interesting to see how the funding process is changing (especially by the new start-up accelerators). This is a pertinent sentence to this article:

“The new pattern looks more like this: launch from an incubator / accelerator (~$50k), get a boost from a micro-VC round ($300k-$500k), and then take a $1m-$2m “Bullpen” type round to hit your key proof-points.”

- phil

The newest Cooley Venture Financing Report indicates that median Series A pre-money valuations were at an 8-year high in Q2 2012, leaving some seasoned venture capitalists scratching their heads.

Michael Greely, a partner at Flybridge, put it succinctly in a recent post when he said “Series A round sizes have been coming down over the last few years as companies can get by with raising less capital … I expected valuations for Series A to be a fraction of the $11 million witnessed.”Michael also did some back-of-the-envelope analysis using the common benchmark that “companies are raising ~$5 million in typical Series A rounds.”

This $5m benchmark makes sense for VCs that invest in capital-intensive sectors like biotech. It also makes sense for the bigger VC funds, as data from the NVCA indicates that almost 80% of the $5.9B invested in VC funds in Q2 2012 went to the top five firms. That is an astounding concentration, and the nose-bleed VCs simply can’t write checks less than $5m-$6m and hope to deploy this capital effectively.

via Re: Defining the Series A «.

Emedly test

August 14, 2012 in Uncategorized with 0 Comments

 

 

When you take your friend's phone and they try to get it from you:

 

http://blog.flashissue.com/5-must-read-articles-on-content-curation-tools/

Content Curation Tips & Curation Tools

August 14, 2012 in Curation with 0 Comments

Content Curation Tips for Stellar Social MediaWhat is content curation? It is the act of finding content to share throughout social media platforms. Finding relevant, interesting, and informative content to post is important for anyone in social media. There is an art and science to finding the best content and it is well worth your time to be thoughtful and careful in what you share. Give people a reason to follow you and keep following you! Per Beth Kantor , “Content curation is not about collecting links or being an information pack rat, it is more about putting them into a context with organization, annotation, and presentation. Content curators provide a customized, vetted selection of the best and most relevant resources on a very specific topic or theme.” The first step is defining what your topic or focus will be for your content. What do you want to be known for? What is your business focus? Pick several keywords for your content and be consistent. These words should also be used throughout your social media profiles so that people will find you when they search for keywords that interest them. This doesn’t mean that you have to share only social media (if that was your keyword) but a good percentage so it is clearly your focus. (Continue Reading …)

Embedly Powered

via Pegfitzpatrick

 

Your Best Options for Sharing Content Through Email

July 17, 2012 in Marketing with 0 Comments

Creating quality content is now a prerequisite for social media marketing efforts. Let’s have a look at how email marketing is keeping up with this changing landscape.

New guys on the block:

More and more marketers are using email to deliver content. You’ve probably started seeing these digest-style emails from your favorite sites recapping their top content.Here is a pair of examples click picture to expand:

via Your Best Options for Sharing Content Through Email | Content Marketing Institute.

 

Create A Newsletter Now (for Free) – Go to FlashIssue

 

 

 

The Design Dilema for Lean Startups

June 20, 2012 in Entrepreneur with 0 Comments

How much should i design? How much should i measure / analyse? Good questions…this article delves into the former and my post the latter. The gist of this article is that a Minimum Viable Product (MVP) , can be broken into 2; Minimum Viable Features and Minimum Viable design. You need to do as much as is necessary to validate your assumptions – phil   

One of the top questions I get when helping entrepreneurs, especially those who have not achieved product/market fit, is “How much should I invest into the design of my… landing page,  MVP,  smoke-test, pitch deck,… etc.”  The commonly cited answer is that “it depends.” But it depends on WHAT?

The dilemma

Calculating the right level of form in relation to function is one of the longest running debates across all the disciplines of design.  In simple terms, it’s deciding the balance between the utility a product provides (function) and the beauty of it (form).  As the classic example below taken from the Universal Principles of Design book shows, focusing heavily on one area greatly impacts the end result.

via The Design Dilema for Lean Startups.

Using analytics and metrics versus gut feel

June 20, 2012 in Entrepreneur with 0 Comments

I’m working into the mine field of analytics for Flashissue. We’re 2 months into a product launch and following a lot of that “lean start-up” thinking.

Big dilema = what’s the balance between using analytics and metrics versus using gut feel.

(To put the discussion in context, the product is a content curation tool that let’s small businesses quickly create email newsletters and social media campaigns i.e. a fairly high volume of users trying the product who i’ll want to convert to paid customers)

Yes, we should now be in that feedback-iterate feedback-iterate loop (we are) and in order to do this well we need to be able to measure measure measure, right?

This comes at a cost though…how much management / dev resource do i throw at it all versus using my gut about whether things are working or not.

Here’s where i’m at, so i’m interested to know your thoughts if you’ve been in a similar postion:

Reports:
  • Cohort reports (to show how i’m retaining and engaging users)
  • Funnel reports (to show how well i’m acquiring users)
  • Live reports (to show when and what users are doing)
Example:
Implementation:

I’m reviewing these products. They all have plus and minus points and i’m up to my eyeballs in blog reviews

  • Kissmetrics / Mixpanel / Google Analytics (for the reports) – not easy to implement and use (plus the former 2 = $$$$)
  • intercom.io/ for in-product messaging and engagement
  • Uservoice for feedback/support

To be honest, i could channel the entire dev team at creating / managing these analytics for a month and still have more to do.

My entrepreneurial side says:

“screw all this, you’ll know whether your product is taking off or not, use your gut and experience and save yourself the heart ache and frustration of pulling the guys off building the product”.

… And the internal debate rages on about using analytics and metrics versus gut feel.

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