Remove Cost Remove Differentiation Remove Revenue
article thumbnail

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. Simplifying: Revenue -. Cost of Goods Sold (COGS) =.

Startup 418
article thumbnail

Are Business Plans Still Necessary?

Both Sides of the Table

In all of these new product and cost-focused new trends, a big problem has emerged that all of these movements have not addressed. Let’s take your revenue line. If you plan to charge more than them I need to know how your product will differentiate to command a premium. The cost side of the equation is also important.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

What Happens When Startups Turn from Their Innovation Stage to Operational Excellence?

Both Sides of the Table

MakeSpace (as he named it) would help you get your excess goods into low-cost warehouses. As companies get this initial customer feedback on their product they start to have to ask harder questions about unit economics: How much does it cost us to acquire a new customer? and we were met with weak demand, slow growth and high costs.

article thumbnail

Why large companies acquire small companies

A Smart Bear: Startups and Marketing for Geeks

Revenue multiples, profit multiples, premium over the previous financing — these are metrics used by sellers to help determine a minimum acceptable price. Even for startups, it takes years for a new product to become good enough to demand many millions of dollars in revenue.).

article thumbnail

What Can You Learn From Ring’s Astounding Success?

Both Sides of the Table

Of course we have to believe that there is a viable market, a differentiated product offering and a chance to build something defensible but if you do those basics right you still get crushed without an amazingly talented founder. Having recurring revenue allows you to keep the original purchase price down, which in turn increases sales.

Security 247
article thumbnail

I Just Invested in @Burstly, a Mobile Ad Management Company

Both Sides of the Table

Summary view for people who don’t want to read all of the details: it helps you optimize your revenue by comparing the effectiveness of all possible monetization types: cross promotion, in-app purchasing or ads. it provides complete transparency in how much advertisers are paying, how much Burstly takes and what your revenue is.

Mobile 282
article thumbnail

[Review] The Three Rules – How Exceptional Companies Think

YoungUpstarts

More importantly though, Raynor and Ahmed uncovered three very simple rules that differentiated the best from the rest: 1. Revenue before cost. You know the trend of cutting costs to boost profitability? The advantages of higher revenue tend to be more valuable than the advantages of lower cost. Everything.