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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

Gross Burn vs. Net Burn. Burn rate in case you don’t know is the amount of money a company is either spending (gross) or losing (net) per month. (it Net burn is the amount of money you are losing per month. I often see companies burning $100,000 per month (net) looking to raise $6-8 million.

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Should Startups Focus on Profitability or Not?

Both Sides of the Table

If you hire 6 sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business for 4-6 months. ” If you’re not profitable you’re purely a cost center to them. Cost of Goods Sold (COGS) =. Operating Costs.

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How to Estimate a “Net Value” for Your A/B Testing Program

ConversionXL

But when you want to deliver a realistic impression of their added value, have a skilled person from your team or agency correct the projected (or “discovered”) uplift to a more accurate “net value.”. The “net profit” calculation is a better way to estimate the impact of the initial results we get from a series of A/B tests.

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Airbnb S-1 (Part 1): So How Profitable Is This Thing Really?

View from Seed

Airbnb convinced travelers to part with 100% of their booking cost up front and then they pay out the required amount to hosts when the stay actually occurs. But even with this profitable Q3, on a trailing twelve months (TTM) basis Airbnb has a GAAP net loss of >$1 billion.

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The Shift from FOMO to FOLD in Early Stage Investing

View from Seed

This is unfortunately a net negative for the ecosystem, as it will be tougher for first time founders and underrepresented minorities to get capital in this environment. However, not everything will be a net negative to the ecosystem. I think VCs doing real diligence is probably a good thing.

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Why Online Video Just Took One More Big Step to Legitimacy

Both Sides of the Table

Anyone who reads this blog frequently will know that I am a big believer in low-cost video content and specifically the power of YouTube as a content creation & distribution platform. Production costs have fallen more than 90%. Distribution costs have, too. You can’t change media consumption patterns easily.

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‘Do-It-Yourself’ Startups Have Never Been Easier

Startup Professionals Musings

The cost of entry has never been lower. In the early days (20 years ago), most new e-commerce sites, for example, cost a million dollars to set up. The cost for the domain name is maybe $10/year, and the hosting starts around $50/year. Now the price is closer to $100 if you are willing to do the work yourself. Start simple.

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