Startup Professionals Musings

SEPTEMBER 14, 2016

Investors check your burn rate to assess your efficiency, and project your remaining runway before you run out of money and into a brick wall. It doesn’t take a financial genius to recognize that you need to keep your burn rate low. Cash flow out equates to burn rate, and the runway depends on your reserves.

Burn Rate 120

Burn Rate Hockey Stick Startup Salary 120

Both Sides of the Table

DECEMBER 16, 2009

I advocated LOUDLY at the board that we needed to cut our burn rate. We couldn’t cut product development (we had 23 people!) We were SMOKING cash. Listen, I know that if you like what we do then you’ll want a healthy supplier / partner.

Entrepreneur 306

Entrepreneur Burn Rate Cofounder Sales 306

Both Sides of the Table

OCTOBER 12, 2010

If you can’t figure all of this out then adding a non-founder sales person isn’t going to solve your problems – it’s just going to add to your burn rate. And he rapidly iterates that back into product development to rapidly respond to customer requests and has the messages straight into our sales campaigns.

Hiring 346

Hiring Sales Startup Early Stage 346

Feld Thoughts

SEPTEMBER 16, 2011

A company at this stage could also face product development costs from consultants if they decided to outsource product development. However, Praveena has committed to personally get the first version of the product up and launched without outside consultants, so there is no expense here either.

Balance Sheet 126

Balance Sheet Fractional CTO Burn Rate Salary 126

Feld Thoughts

NOVEMBER 18, 2013

Had the company created a board and run it properly, they would have ratified a budget, reviewed compensation plans, and agreed on spending levels during early product development. Real Product and Market Focus – This company lost 3-6 months of execution because they got lost building towards a high level vision.

Burn Rate 153

Burn Rate Equity Software Review Early Stage 153

The Next Web

DECEMBER 2, 2013

Considering Facebook’s scale, the company is now in the business of operating power plants to operate its servers, therefore, Schippers estimates that Facebook has a $30 million dollar monthly burn rate just for hosting. But if you were to replicate the product exactly, all those decisions are made for you. 4) WhatsApp.

Cost 168

Cost San Francisco New York City Ruby 168

Berkonomics

OCTOBER 5, 2023

Fixed overhead for salaries, rent, equipment leases and more make up the majority of the “burn rate” (monthly expenses) for most companies. Since this number is budgeted and pre-authorized, managers tend to focus upon other things such as sales, marketing and product development issues. The art of good management.

Silicon Valley 118

Silicon Valley Burn Rate Angel Investor Down Round 118

Berkonomics

AUGUST 10, 2017

Fixed overhead for salaries, rent, equipment leases and more make up the majority of the “burn rate” (monthly expenses) for most companies. Since this number is budgeted and pre-authorized, managers tend to focus upon other things such as sales, marketing and product development issues.

Silicon Valley 97

Silicon Valley Burn Rate Angel Investor Down Round 97

crowdSPRING Blog

SEPTEMBER 19, 2014

Are startup burn rates out of control? Six Things Physical Product Development Taught Me About Experience Design | UX Magazine – crowdspring.co/X7NCjD. Be Honest: Are You Really The Best Boss for Your Business by Howard Tullman – crowdspring.co/1u86ES3. They seem to be | AVC – crowdspring.co/1rbM5FT.

Social Media 94

Social Media Small Business Design Media 94

Up and Running

FEBRUARY 20, 2015

However, there are a number of metrics that every business owner should know, including cash flow, accounts payable, accounts receivable, direct costs, operating margin, net profit, and cash burn rate. What Is Cash Burn Rate? Cash burn rate is the rate at which a company uses up its cash reserves or cash balance.

Metrics 60

Metrics Burn Rate .Net Churn Rate 60

Berkonomics

MARCH 30, 2010

Fixed overhead for salaries, rent, equipment leases and more make up the majority of the “burn rate” (monthly expenses) for most companies.

Silicon Valley 85

Silicon Valley Burn Rate Angel Investor Down Round 85

Mucker Lab

MAY 28, 2020

These lost startups land higher valuations, have larger teams, outsource more product development and spend more money on customer acquisition than their peers. Before you indulge in marketing, sales and blinged-out offices, find product-market fit. More and more investors have begun to shun high burn rates.

Startup 78

Startup Cofounder Burn Rate Technical Review 78

Startup Professionals Musings

JULY 2, 2022

Both risks and opportunities in this area can arise from many aspects of your startup, before and after product development. Then you walk the delicate balance between burn rates, revenue flows versus expenses, investment in marketing, and employees. Operational.

Burn Rate 382

Burn Rate Angel Investor Operations Demand 382

Steve Blank

NOVEMBER 18, 2010

Now the company is in crisis mode because the rest of the organization (product development, marketing, etc.) Why it’s not a crisis is that the Customer Development process says, “do not staff and hire like you are executing. The alternative to firing and crises is the Business Model/Customer Development process.

Burn Rate 252

Burn Rate Management Business Model Customer Development 252

Startup Professionals Musings

SEPTEMBER 30, 2019

Both risks and opportunities in this area can arise from many aspects of your startup, before and after product development. Then you walk the delicate balance between burn rates, revenue flows versus expenses, investment in marketing, and employees. Operational.

Entrepreneur 267

Entrepreneur Burn Rate Angel Investor Operations 267

Steve Blank

AUGUST 27, 2012

Tossing their agile development process and at times their entire business model in the air, the company would go into fire-drill mode and engineering would start working on whatever his latest insight was. Other weeks Yuri would be buffeted by the realities of his burn rate, declining bank account and depressing comments from customers.

Founder 323

Founder Cofounder Advisory Board Burn Rate 323

View from Seed

OCTOBER 15, 2014

Examples of housekeeping include the following list, though not every item will appear every time: Finance: Cash out date, burn rate, 409A valuation, cap table, common/preferred stock dashboard. Even if there’s some kind of product in the market during the first round of financing, it’s probably to be unproven.

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

Startup Professionals Musings

JANUARY 17, 2014

Both risks and opportunities in this area can arise from many aspects of your startup, before and after product development. Then you walk the delicate balance between burn rates, revenue flows versus expenses, investment in marketing, and employees. Operational.

Burn Rate 234

Burn Rate Angel Investor Entrepreneur Operations 234

Steve Blank

SEPTEMBER 17, 2009

This post describes a solution – the Customer Development Model. In future posts I’ll describe how Eric Ries and the Lean Startup concept provide the equivalent model for product development activities inside the building and neatly integrates customer and agile development. This post describes such a model.

Customer Development 255

Customer Development Developer Customer Silicon Valley 255

Startup Professionals Musings

OCTOBER 22, 2017

Both risks and opportunities in this area can arise from many aspects of your startup, before and after product development. Then you walk the delicate balance between burn rates, revenue flows versus expenses, investment in marketing, and employees. Operational.

Burn Rate 170

Burn Rate Angel Investor Operations Demand 170

VC Adventure

MARCH 17, 2022

With the markets down significantly, financings (at least at the later stages) slowing down, and inflation and interest rates on the rise, perhaps now is a good time to talk about your burn rate. Hopefully, you took advantage of the robust financing markets of the past few years to put some money on your balance sheet.

Balance Sheet 92

Balance Sheet Burn Rate Metrics Valuation 92

YoungUpstarts

JUNE 17, 2019

Startups are regarded for their embrace of industry disruption, all the while constantly trying to limit their burn rate and conserving their capital for future growth. Marketing: startup style. Marketing for startups means marketing for efficiency. corporations.

Marketing 147

Marketing Startup Burn Rate Advertising 147

BeyondVC

DECEMBER 10, 2009

So first and foremost, I let him know that while it was nice to have a well thought out spreadsheet, that the most important thing was getting the product developed and the right team in place. While many SAAS companies may collect cash monthly or quarterly, some collect annual fees by offering discounts by paying upfront.

Churn Rate 112

Churn Rate Burn Rate Startup Metrics 112

Startup Professionals Musings

MARCH 30, 2015

Both risks and opportunities in this area can arise from many aspects of your startup, before and after product development. Then you walk the delicate balance between burn rates, revenue flows versus expenses, investment in marketing, and employees. Operational.

Entrepreneur 120

Entrepreneur Burn Rate Startup Angel Investor 120

ReadWriteStart

JANUARY 27, 2011

And a few words about Persistent Systems, an outsourced software product development (OPD) company that is navigating its next phase of evolution are also warranted. Jeff has managed to keep his burn rate very low thus far, and a slow and steady crafting of the business is working nicely.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

BeyondVC

DECEMBER 9, 2009

  So first and foremost, I let him know that while it was nice to have a well thought out spreadsheet, that the most important thing was getting the product developed and the right team in place.    This is a great way for SAAS companies to keep the cash coming in earlier so they can use it to fuel growth.

Churn Rate 78

Churn Rate Burn Rate Startup Metrics 78

The Equity Kicker

JULY 16, 2015

Companies with lots of cash sometimes add people more quickly, but that drives the burn rate up, often without a compensating increase in the chance of success. In the first couple of months the focus should be on making sure the idea is valid, requiring the following activities: Development of the company vision and strategy.

eCommerce 60

eCommerce Burn Rate Early Stage Hiring 60

ithacaVC

MARCH 14, 2011

It may have multiple people in each category, but for purposes of this post, let’s assume one tech founder, one business founder and then some additional “first employees” It would be normal for these first employees to be involved in product development. I am not going to focus on those aspects.

Early Stage 45

Early Stage Founder Burn Rate Cofounder 45

The Equity Kicker

JANUARY 10, 2020

It’s got a big burn rate, it’s too big to pivot, and it goes bust. Our team helped them figure out the product vision, we put incredible work into testing prototypes, and then our product developers built it – launching in time for the football season in August 2019. And everyone’s lost a lot of money.

Partner 68

Partner Early Stage Portfolio Metrics 68

Startup Lessons Learned

MARCH 27, 2009

The full formula works like this: runway = cash on hand / burn rate # iterations = runway / speed of each iteration Very few successful companies ended up in the same exact business that the founders thought theyd be in (see Founders at Work for dozens of examples). Were talking PayPal -sized variations. Work in small batches.

San Francisco 117

San Francisco Lean Continuous Deployment DC 117

Startup Lessons Learned

MARCH 13, 2009

The product didnt convert well enough, the mainstream customers we were driving werent ready for the concept, and the event fed expectations about how successful the product was going to be that turned out to be hyper-inflated. Why do startups synchronize marketing launch and product launch?

San Francisco 168

San Francisco PR Lean Early Stage 168

Startup Lessons Learned

JANUARY 30, 2009

Without conscious process design, product development teams turn lines of code written into momentum in a certain direction. This is why agility is such a prized quality in product development. As far as I know, there are no products that are immune from the technology life cycle adoption curve.

San Francisco 150

San Francisco Lean Agile Continuous Deployment 150