Burn Rate and Channel

It Must Be A Marketing Problem

Steve Blank

FEBRUARY 11, 2010

In Discovery startups take all their hypotheses about the business model: product, market, customers, channel, etc. Six is a Proxy for Burn Rate. Later I realized six salespeople without revenue to match was a proxy for an out of control burn rate that now had the boards serious attention.

Burn Rate

Burn Rate Silicon Valley Marketing Boston

Getting Your Head in the Game for Fund Raising

Both Sides of the Table

APRIL 23, 2017

You have cash in the bank, a monthly burn rate and a “cash out” date that few in the company truly comprehend. Back Channel I mentioned earlier back-channeling as a way to get feedback after a pass on how to improve. Back-channeling is also very effective in helping your process. They’re wrong.

Burn Rate

Burn Rate Term Sheet Fractional CTO CTO Hire

Lean Startups aren't Cheap Startups

Steve Blank

NOVEMBER 2, 2009

The key contributors to an out-of-control burn rate is 1) hiring a sales force too early, 2) turning on the demand creation activities too early, 3) developing something other than the minimum feature set for first customer ship. And most startup code and features end up on the floor as customers never really wanted them.

Lean

Lean Silicon Valley Startup RSS

Making Financial Projections is Not Rocket Science

Startup Professionals Musings

JUNE 9, 2012

Next comes sales volume by channel. Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. Unless your volumes are in the millions or higher, the difference between manufacturing cost and customer price better be 50% or greater. This forecast is really their commitment.

Forecast

Forecast Burn Rate .Net Business Model

Business Plan Financial Forecasts Test Your Savvy

Startup Professionals Musings

JULY 15, 2013

Next comes sales volume by channel. Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. Unless your volumes are in the millions or higher, the difference between manufacturing cost and customer price better be 50% or greater. This forecast is really their commitment.

Forecast

Forecast Business Plan Burn Rate .Net

Four Easy Steps to Credible Startup Financials

Startup Professionals Musings

MARCH 22, 2011

Next comes sales volume by channel. Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. Unless your volumes are in the millions or higher, the difference between manufacturing cost and customer price better be 50% or greater. This forecast is really their commitment.

Forecast

Forecast Burn Rate Startup .Net

How to Optimize Startup Financial Projections

Startup Professionals Musings

MARCH 25, 2010

Next comes sales volume by channel. Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. Unless your volumes are in the millions or higher, the difference between manufacturing cost and customer price better be 50% or greater. This forecast is really their commitment.

Forecast

Forecast Startup Burn Rate .Net

Startup Benchmarks

VC Cafe

NOVEMBER 2, 2019

In SaaS the main benchmarks being measured are revenue growth, sales efficiency (unit economics), churn and burn rate. Rob Go: How Much Traction Do You Really Need to Raise a Seed or Series A Round? Software as a Service (Saas) benchmarks. One of my favourite resources for SaaS benchmarking is The SaaS Napkin by Point Nine Capital.

B2C

B2C Technical Review Startup Retention

4 Simple Steps Will Get Startup Financial Projections

Startup Professionals Musings

FEBRUARY 5, 2021

Project based on your market size how many widgets you will sell in every channel. Project your cash burn rate to keep at least 18 months between venture capital or angel investments. Forecast sales-volume expectations. This should always be a “bottoms-up” commitment from your sales team, not your own optimistic guess.

Forecast

Forecast Burn Rate Startup Widget

Crisis Management by Firing Executives – There’s A Better Way

Steve Blank

NOVEMBER 18, 2010

A business plan has a set of assumptions (who’s the customer, what’s the price, what’s the channel, what are the product features that matter, etc.) The web site and/or product presentation slides start changing and Marketing and Sales try different customers, different channels, new pricing, etc. that make up a business model.

Burn Rate

Burn Rate Management Business Model Customer Development

4 Key Components Of Every New Business Financial Plan

Startup Professionals Musings

OCTOBER 16, 2023

Project based on your market size how many widgets you will sell in every channel. Project your cash burn rate to keep at least 18 months between venture capital or angel investments. Forecast sales-volume expectations. This should always be a “bottoms-up” commitment from your sales team, not your own optimistic guess.

Forecast

Forecast Burn Rate Widget Bootstrapping

Vision versus Hallucination – Founders and Pivots

Steve Blank

AUGUST 27, 2012

Other weeks Yuri would be buffeted by the realities of his burn rate, declining bank account and depressing comments from customers. He should make sure that there aren’t other parts of the business model (revenue model, pricing, partners, channel, etc.)

Founder

Founder Cofounder Advisory Board Burn Rate

Get to Know Richard de Silva of Highland Capital

Both Sides of the Table

APRIL 23, 2011

It has become a short form premium destination that is verticalizing content in category channels. They had a very expensive burn rate at the wrong time. Do you think a multi-channel distribution strategy is important to guard against unforeseen changes? (51:30 Why do you think Veoh didn’t succeed? (40:30 40:30 –41:30).

Vertical

Vertical Curation Boston Burn Rate

9 Metrics Every Entrepreneur Should Know About Their Business Offhand

Up and Running

SEPTEMBER 17, 2014

ROI per Marketing Channel. It’s crucial to keep a handle of ROI per marketing channel in order to optimize marketing spending. This is the rate at which a company uses up its capital to finance overhead before generating positive cash flow from operations. It’s not enough to check this every quarter.

Metrics

Metrics Burn Rate Entrepreneur Forecast

5 Keys To New Venture Financial Projections That Work

Startup Professionals Musings

DECEMBER 11, 2017

Based on your market size and penetration expectations, size how many units you will sell, at what price, in every channel. Calculate cash-burn rate and investment timing. Project your cash burn rate to keep at least 18 months between venture capital or angel investments. Project unit-volume and price levels.

Burn Rate

Burn Rate Forecast Angel Investor Revenue

5 Shark Tank Lessons Every Startup Should Understand

Up and Running

DECEMBER 11, 2013

Investors like valuation to relate to actual business numbers, such as sales, gross margin (price less direct costs), and burn rate or fixed costs. More often, it’s secret formulas, secret ingredients, trade secrets, and relationships with channels of distribution. It’s simple math. . Sometimes it’s progress made in branding.

Valuation

Valuation Oregon Burn Rate Angel Groups

2023-2024 B2B SaaS Benchmarks

VC Cafe

JUNE 6, 2024

Burn Rate Definition: Burn rate is the rate at which a startup is spending its capital to finance operations before generating positive cash flow. Multiple User Acquisition Channels : PLG companies use a wider mix of social channels, with 41% leveraging Instagram.

B2B

B2B Burn Rate Generative AI Retention

The Three Benefits Of Nailing Before Scaling

YoungUpstarts

JANUARY 11, 2018

By saturating one market or sub-market at a time, we started building the best marketing channel there is: word of mouth (WOM). That’s why WOM marketing is the most ef- ficient marketing channel that exists. Our approach with VEEV — going slow in the beginning — actually made acquiring customers easier.

Los Angeles

Los Angeles Investment Bankers Cofounder Viral

Strategy Roundtable For Entrepreneurs: Non-dilutive Financing Through Revenue Sharing

ReadWriteStart

JANUARY 27, 2011

This partnership speaks to a core philosophy of the program where we encourage entrepreneurs to get as much customer validation as possible before raising too much money, use other people's channels if you can get to them, don't burn too much cash, and all that good fiscal conservative stuff.

Dilution

Dilution Revenue Finance Entrepreneur

8 Ways An Investor Pitch Differs From A Product Pitch

Startup Professionals Musings

AUGUST 7, 2015

Partnerships, distribution channels and pricing models should be included. “If This allows them to calculate burn rates, break-even points and forecast the company valuation over time. Specific elements of your marketing and sales plans. If we build it they will come” is not a marketing and sales strategy.

Product

Product Intellectual Property Liquidity Event Burn Rate

An Inside Scoop on the Funding Environment and What it Might Mean for You

Both Sides of the Table

MARCH 30, 2016

Mark dutifully went to partner meetings, back-channel references began, firms started calling existing VCs to “test prices” and we started debating whom our best partner would be. We had grown into a more reasonable burn rate so raising capital meant we would have many years of cash on the balance sheet.

Balance Sheet

Balance Sheet Burn Rate Valuation Forecast

Customer Development Manifesto: The Path of Warriors and Winners.

Steve Blank

SEPTEMBER 17, 2009

Customer Development is Low Burn by Design The Customer Development process keeps a startup at a low cash burn rate until the company has validated its business model by finding paying customers. The absolute number depends on your channel and industry.

Customer Development

Customer Development Developer Customer Silicon Valley

Entrepreneur Business Forecasts Are Not Black Magic

Startup Professionals Musings

JANUARY 4, 2015

Project based on your market size how many widgets you will sell in every channel. Project your cash burn rate to keep at least 18 months between venture capital or angel investments. Forecast sales-volume expectations. This should always be a “bottoms-up” commitment from your sales team, not your own optimistic guess.

Forecast

Forecast Entrepreneur Burn Rate Widget

Why Content Favors the Old (Entrepreneur)

pandodaily.com

JULY 18, 2012

While a 21-year-old with no mortgage, no girlfriend and a low-burn rate may have nothing to lose, a 40-year old with a career, a mortgage and kids has everything to lose. There has to be nothing else in the world you can do and possibly be happy. No new parent is starting a company just for the life experience of starting a company.

Entrepreneur

Entrepreneur San Francisco Silicon Valley Technical Review

How do seed VCs pick their investments?

Hippoland

FEBRUARY 7, 2016

What customer acquisition channels / what have they tried / not tried / etc] [Is this growing? / May or may not ask this depending on if our hypothetical VC firm leads rounds or not] [What is a team’s burn rate?] [lifetime value] [How much revenue are you making and how has this changed over the last few months? how quickly?]

Burn Rate

Burn Rate IP Cofounder Differentiation

The Secret History of Silicon Valley Part V: Happy 100th Birthday.

Steve Blank

APRIL 20, 2009

In contrast, spark gaps are broad-band radio “noise&# sources – the idea of discrete radio channels was impossible spark gaps because of this. I’ll stop channeling James Burke now. But in fact, most startups need to keep their burn rate low more [.] to do that.

Silicon Valley

Silicon Valley RSS San Francisco Technical Review

Is the Lean Startup Dead?

Steve Blank

SEPTEMBER 5, 2018

These bubble startups were actually guessing at their business model and did premature and aggressive hype and early company launches and had extremely high burn rates – all predicated on an IPO to raise more cash. Startups with huge burn rates – building leases, staff, PR and advertising – ran out of money.

Lean

Lean Burn Rate Startup IPO

22 Entrepreneurs Share Their Thoughts on The Future of Entrepreneurship

Hearpreneur

JULY 7, 2019

Over the next 10 years, entrepreneurship will reach a peak of new startups, increasing the burn rate of founders and the failure rate for new ecosystems. Using just a laptop and a digital camera, we’ve all got the chance to start the next killer podcast or youtube channel. Photo Credit: Mario Peshev.

Entrepreneur

Entrepreneur Distribution Employee Arizona

Lessons Learned: Don't launch

Startup Lessons Learned

MARCH 13, 2009

Again, its critical to focus your marketing launch on those publications, venues, and channels that your potential partners are paying attention to. And even worse, wed cranked up the burn rate in order to be ready to handle all those millions of mainstream customers we anticipated. Instead, do your product launch first.

San Francisco

San Francisco PR Lean Early Stage

No Accounting For Startups

Steve Blank

FEBRUARY 22, 2010

What’s the distribution channel? Regardless of your type of business model you should be tracking cash burn rate, months of cash left, time to cash flow breakeven. A startup is a search for a repeatable and scalable business model. How do we price and position the product? How do we create end user demand? Who are our partners?

Balance Sheet

Balance Sheet Startup Burn Rate Metrics

StartUpRoar

It Must Be A Marketing Problem

Getting Your Head in the Game for Fund Raising

Trending Sources

Lean Startups aren't Cheap Startups

Making Financial Projections is Not Rocket Science

Business Plan Financial Forecasts Test Your Savvy

Four Easy Steps to Credible Startup Financials

How to Optimize Startup Financial Projections

Startup Benchmarks

4 Simple Steps Will Get Startup Financial Projections

Crisis Management by Firing Executives – There’s A Better Way

4 Key Components Of Every New Business Financial Plan

Vision versus Hallucination – Founders and Pivots

Get to Know Richard de Silva of Highland Capital

9 Metrics Every Entrepreneur Should Know About Their Business Offhand

5 Keys To New Venture Financial Projections That Work

5 Shark Tank Lessons Every Startup Should Understand

2023-2024 B2B SaaS Benchmarks

The Three Benefits Of Nailing Before Scaling

Strategy Roundtable For Entrepreneurs: Non-dilutive Financing Through Revenue Sharing

8 Ways An Investor Pitch Differs From A Product Pitch

An Inside Scoop on the Funding Environment and What it Might Mean for You

Customer Development Manifesto: The Path of Warriors and Winners.

Entrepreneur Business Forecasts Are Not Black Magic

Why Content Favors the Old (Entrepreneur)

How do seed VCs pick their investments?

The Secret History of Silicon Valley Part V: Happy 100th Birthday.

Is the Lean Startup Dead?

22 Entrepreneurs Share Their Thoughts on The Future of Entrepreneurship

Lessons Learned: Don't launch

No Accounting For Startups

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