Startup Lessons Learned

DECEMBER 23, 2009

Lessons Learned by Eric Ries Wednesday, December 23, 2009 Why vanity metrics are dangerous In a previous post, I defined two kinds of metrics: vanity metrics and actionable metrics. In this post, Id like to talk about the perils of vanity metrics. My personal favorite vanity metrics is "hits."

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Metrics San Francisco Lean Continuous Deployment 167

Steve Blank

SEPTEMBER 14, 2009

Five Quarters of Profitability During the 1980’s and through the mid 1990’s startups going public had to do something that most companies today never heard of – they had to show a track record of increasing revenue and consistent profitability. There was now a public market for companies with no revenue, no profit and big claims.

Silicon Valley 237

Silicon Valley IPO Technical Review Venture Capital 237

Both Sides of the Table

MAY 23, 2012

In an over-funding environment companies are encouraged to eschew revenues in a land grab to acquire eyeballs, clicks, page views or whatever other vanity metrics give VCs the false comfort that they’re sitting on a gold mine. IPO markets had burned an entire cycle of retail stock investors and many institutional investors to boot.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

ConversionXL

AUGUST 13, 2019

SaaS sales and marketing teams can get overwhelmed by metrics. But without any metrics, it’s impossible to track growth. If growth is the best way to get out alive, marketing metrics do little unless they correlate with sales. But only 400 software companies have made it to the $500M revenue mark.

Metrics 117

Metrics SQL Retention Churn Rate 117

Both Sides of the Table

JUNE 5, 2011

Early-stage investors in technology startups are only looking for growth-oriented companies that can achieve an “exit&# someday – either via selling your company to a larger company or via an IPO. million post-money valuation with no revenue. The former is much more likely than the latter. I raised my A round at a $31.5

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Startup Lessons Learned

SEPTEMBER 22, 2008

Master of 500 Hats: Startup Metrics for Pirates (SeedCamp 2008, London) This presentation should be required reading for anyone creating a startup with an online service component. He also has a discussion of how your choice of business model determines which of these metric areas you want to focus on.

San Francisco 167

San Francisco CPA SEM CTO Hire 167

VC Adventure

AUGUST 31, 2017

If you read my blog regularly you know I love (LOVE) metrics. They took the 92 public SaaS companies and analyzed their key operating metrics. The valuation metrics show this clearly. Companies in the study that scored 40% of greater had TTM revenue multiples of 6.4x The methodology here was great. on average.

IPO 113

IPO Vertical Balance Sheet Valuation 113

Startup Lessons Learned

SEPTEMBER 15, 2008

This slinging of whatever against the wall to see what sticks does not a market make, is to me a sign of too much capital in the wrong hands, and it's already the most over invested area in recent years- in both human and financial capital- particularly relative to revenue. Startup Lessons Learned - the Conference (April 23.

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Lean San Francisco Startup Continuous Deployment 168

Startup Lessons Learned

APRIL 14, 2009

Lessons Learned by Eric Ries Tuesday, April 14, 2009 Validated learning about customers Would you rather have $30,000 or $1 million in revenues for your startup? All things being equal, of course, you’d rather have more revenue rather than less. And yet revenue alone is not a sufficient goal. More on that in a moment.

Customer 167

Customer San Francisco Lean Hockey Stick 167

ReadWriteStart

JULY 18, 2011

Kedrosky: "In the 90's I was an analyst through all this [tech investment and IPO] madness. You want to build your own IPO and exit. Every company has a forecast for how it will get to an arbitrary $100 million in revenue and they all hit it on year five. For 10 years there have been no gazelles to take down.

Investment Bankers 153

Investment Bankers Technical Review Cofounder Due Diligence 153

YoungUpstarts

JANUARY 10, 2018

You’ll find exceptions to this rule, like Snapchat, which was operating at a loss at its IPO, when it experienced high initial trading prices due to its huge popularity and untapped monetization capabilities. Another important metric is churn. This the first and foremost way to begin evaluating the sellability of your company.

Valuation 145

Valuation Technical Review Exit Strategy Metrics 145

Gust

JANUARY 31, 2013

Before the commercial Internet, the primary tools of disclosure included: Prospectus and related registration statement (“S-1″) for an IPO. Public companies have dealt with financial disclosure in ways that evolved over time with markets and technologies. Proxy statement in connection with the annual meeting of stockholders.

SEC 158

SEC Prospectus United States Technical Review 158

Agile VC

MAY 26, 2011

Google is still a private company (their IPO was Aug 2004). LinkedIn’s product had only been live for a couple months, we only had tens of thousands of registered users, and wouldn’t start generating revenue for more than a year after this point. is the leading consumer internet company with Terry Semel as CEO.

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

Reid Hoffman

JULY 23, 2020

The fundamental choice that venture-backed entrepreneurs face is simple: M&A or IPO? This strategic value-oriented approach is one of the things that gives Silicon Valley its crazy reputation among traditional investors, who live and die by financial metrics. That focus on short-term financial metrics is shortsighted.

IPO 36

IPO Exit Strategy Acquisition Technical Review 36

crowdSPRING Blog

JANUARY 18, 2013

A VC: MBA Mondays: Revenue Models – Subscriptions – [link]. Thanks To Facebook, Strongest Year For IPOs Since 2000 With $21.5 The 6 Marketing Metrics Your CEO Actually Cares About [Cheat Sheet] | Hubspot Blog - [link]. The 6 Marketing Metrics Your CEO Actually Cares About [Cheat Sheet] | Hubspot Blog - [link].

Social Media 94

Social Media Small Business Design Media 94

Startup Lessons Learned

APRIL 7, 2010

At least, not in the traditional sense of trying to squeeze every tenth of a point out of a conversion metric or landing page. Even if it shows improvement in some micro metric, does that invalidate the overall design? That was evident in the metrics and in the in-person usability tests. No one feature is to blame.

San Francisco 154

San Francisco Lean Metrics Design 154

Startup Lessons Learned

FEBRUARY 20, 2009

If you can start getting ROI on a feature in month one of a twelve month project versus waiting until the end, youve comparatively reduced the cost of development by the revenue generated by that feature over 11 months. Small batches also help deliver value earlier in the project. February 25, 2009 8:12 PM Anonymoussaid. Small is beautiful.

San Francisco 161

San Francisco Software Review Continuous Deployment Development Team Review 161

Startup Lessons Learned

SEPTEMBER 13, 2008

And one day a remarkable thing happened: we started making more than five dollars a day in revenue. ► August (2) SXSW Case Study: SlideShare goes freemium ► July (4) Case Study: kaChing, Anatomy of a Pivot Some IPO speculation Founder personalities and the “first-class man&# th.

SEM 164

SEM San Francisco Lean Continuous Deployment 164

Agile VC

JUNE 5, 2011

So Groupon obviously filed their S-1 the other day to formally being the IPO process. They’ve grown from nothing to >$2B in revenue in 30 months time, making the company among the fastest growing businesses in the histroy of the world. Financial Snapshot: 2010 Revenue: $713M. in net revenue and passes $0.58

North America 100

North America Chicago Boston Silicon Valley 100

reidhoffman.org

NOVEMBER 12, 2013

we had no revenue. As a result, we knew that our pitch would need to steer into investors’ biggest concern: the lack of revenue. Instead, our strategy was to steer immediately into the revenue question because that was the top concern of investors in 2004. We made the mistake of listing three different revenue streams.

Entrepreneur 111

Entrepreneur Viral Revenue Networking 111

Startup Lessons Learned

JANUARY 15, 2010

Behind this analysis is a spreadsheet model, complete with detailed metrics for a set of customer behaviors that show just how valuable the new product will be. They are on-schedule and on-budget, but their gross metrics are way off. Usually, they are delivering only a fraction of the revenue they promised.

Hockey Stick 105

Hockey Stick San Francisco Entrepreneur Lean 105

BeyondVC

APRIL 4, 2018

Look at the Dropbox IPO which priced above its initial value and came out white hot at the end of one of the worst weeks in stock market performance. Couple that with Mulesoft being bought for 21x TTM revenue ( see Tomasz Tunguz analysis ) at $6.5 Their growth to over $509mm of revenue from $281mm 2 years ago is a case in point.

Cloud 78

Cloud Agile Architecture Azure 78

Ben's Blog

MARCH 24, 2011

To find out whether or not today’s public technology companies have hit bubble valuations, let’s compare some companies that survived the great bubble with their bubble era valuations: The Enterprise Value-to-Revenue multiple (EV/Rev) and Price-to-Earnings multiple (PE) are commonly used metrics to tell the valuation:value story.

Technical Review 78

Technical Review Valuation Venture Capital Database 78

David Teten

JANUARY 19, 2021

More and more startups are pursuing Revenue-Based VCs , but “RBI” doesn’t fit everyone. Flexible VC 101: Equity Meets Revenue Share. By tying payments to actual revenues, founders and investors remain aligned around the company’s real-time performance, good or bad. “Too Of the Inc. 5000 companies, only 6.5% raised from angels.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Startup Lessons Learned

NOVEMBER 8, 2008

► August (2) SXSW Case Study: SlideShare goes freemium ► July (4) Case Study: kaChing, Anatomy of a Pivot Some IPO speculation Founder personalities and the “first-class man&# th. The visionary’s lament The Superbowl ad test Lo, my 57692 subscribers, who are you? Startup Lessons Learned - the Conference (April 23.

Customer Development 168

Customer Development Developer San Francisco Customer 168

Startup Lessons Learned

FEBRUARY 10, 2009

In a lot of cases, thats just a fancy name for revenue or profit, but not always. ► August (2) SXSW Case Study: SlideShare goes freemium ► July (4) Case Study: kaChing, Anatomy of a Pivot Some IPO speculation Founder personalities and the “first-class man&# th. Startup Lessons Learned - the Conference (April 23.

Continuous Deployment 123

Continuous Deployment San Francisco Software Review Lean 123

Up and Running

MAY 1, 2014

Milestones and Metrics. Milestones and Metrics. While the Milestones and Metrics chapter of your business plan may not be long, it’s critical that you take the time to look forward and schedule the next critical steps for your business. Read more ». Marketing and Sales Plan. How are you going to reach your target market?

Business Plan 163

Business Plan Forecast Balance Sheet Distribution 163

A Smart Bear: Startups and Marketing for Geeks

JULY 23, 2013

Marketo filed for IPO with impressive 80% year-over-year growth in 2012, with almost $60m in revenue. of revenue, force-feeding sales pipelines with an unprofitable product. SaaS companies earn their revenue over time. time to earn back the revenue to cover all your customer acquisition expenses) 75% annual retention.

Business Model 335

Business Model .Net Revenue IPO 335

Startup Lessons Learned

AUGUST 24, 2009

Despite all the energy invested in talking to authors about the size of their platform, very few gatekeepers have a rigorous set of metrics for measuring it. The problem is that there are no other metrics they can look at to judge the content of a book to know if it’s worth reviewing. What is the right revenue model?

San Francisco 113

San Francisco Lean Technical Review Distribution 113

Startup Lessons Learned

JUNE 5, 2009

And so the spreadsheet is built with conservative assumptions, including a final revenue target. No matter how low we make the revenue projections for this new product, it’s extremely unlikely that they are achievable. In a startup context, numbers like gross revenue are actually vanity metrics, not actionable metrics.

San Francisco 102

San Francisco Lean Continuous Deployment Startup 102

Startup Professionals Musings

JANUARY 17, 2022

Pick a single metric that is the focus for all growth. Today’s world is full of metrics leading to business growth, including customer logins, revenue per customer, retention, and average solution price. Revenue and competitive position followed. Less is more. But never take your eye off today’s customer.

Startup 361

Startup Social Media India Acquisition 361

Cracking the Code

MAY 25, 2010

A few highlights from the different keynotes and speakers On top of Jason, we also had the chance of having many great speakers at the event and here are a few quotes and notes that I have taken during the different keynotes and panels: Joe Payne, CEO of Eloqua moderated the panel on Revenue Performance Management. ipo process.

Software Review 74

Software Review Cloud IPO Jordan 74

Startup Lessons Learned

JUNE 15, 2009

There are a whole range of valid reasons why non-developers would want to dictate the production release schedule (Seasonal/timing issues, marketing, fulfillment concerns, documentation/training, revenue controls, legal/regulatory. " Actually this process works really well in a financial company.

Continuous Deployment 167

Continuous Deployment Software Review San Francisco Lean 167

Feld Thoughts

JULY 9, 2019

This was before the IPO Summer of 2019 when all conventional valuation metrics have entered the land of “suspension of disbelief” which is short-term good and long-term well-we-will-see-…-eventually. We ended up talking about using Gross Profit, instead of Revenue, to do valuation analysis.

Revenue 179

Revenue Valuation .Net Boston 179

Startup Lessons Learned

NOVEMBER 17, 2008

Growth - when you have existing customers, the pressure is on to grow your key metrics day-in day-out. If youre making revenue, you should be finding ways to grow it predictably month-over-month; if youre focused on customer engagement, your product should be getting more sticky, and so on.

San Francisco 88

San Francisco Lean Continuous Deployment DC 88

Startup Lessons Learned

DECEMBER 14, 2009

A business that strives for something like this should absolutely be charging money from day one, in order to establish baselines for their two key metrics: CPA (the cost to acquire a new customer) and LTV (the lifetime value of each acquired customer). This is the simplest ecosystem and simplest driver of growth.

Customer 156

Customer San Francisco Viral Lean 156

Startup Lessons Learned

AUGUST 1, 2009

Not even if its generating revenue. ► August (2) SXSW Case Study: SlideShare goes freemium ► July (4) Case Study: kaChing, Anatomy of a Pivot Some IPO speculation Founder personalities and the “first-class man&# th. Heres hoping Steve will share those techniques with us someday.

San Francisco 166

San Francisco Lean Continuous Deployment DC 166