if someone will pay for what u have, it might be valuable.
I'm glad Marc Cuban is more a fan of startups generating revenue than Jeff Clavier. Cnet paraphrasing /interpreting Clavier on startups "revenue is noise" meme : "... if it's in the $300,000 a month range--a range that most companies made up of three guys and a credit-card funded Amazon S3 account would kill for--is "noise" that distracts them from their potential."
Cuban's take I much prefer, in one of his rules for a startup : "Sales Cures All. Know how your company will make money and how you will actually make sales." We've just updated our IM (ping if u want a copy money folk reading this) and its great to see quarterly revenue numbers doubling+ for the last 3 quarters. The lesson though was we had to be able to fight and setup the building blocks over 3 years.
So revenue in a startup is key, but dont think that your excel model that says it will happen in year 1 or even year 2 is accurate. And alot of startups dont give themselves enough oxygen (money + time) to be able to prove if there is a viable business model there. So once u miss your earlystage hockeystick projections its game over before it started, if u raised not enough money or set the wrong expectations with investors and triggered one of those shareholder agreement clauses u glossed over when taking the money.
The other lesson is that once you start generating real revenue it becomes even more dangerous to manage cashflow month to month, as accounts receivable blows out, payroll goes out, and you have a net negative gap u need to be able to manage.
As Tony Wright says via a vc; "You’ll think you are on the verge of death early and often, but you aren’t– and you can make it through if you start with an idea that people want and keep working on #1." ("# Build something people want. This will make or break you. Period. The success of your idea is a function of how much people want it and how many people want it. Make your product better on this front every single week. Every single DAY, if you can. Everything else is a distraction.")
The Fake Steve Jobs was funny tho on this topic* (as it applies to Facebook's raison d'etre) : "Facebook is a vehicle through which a bunch of investors in the Valley hope to turn a small pile of money into a much bigger pile of money by selling shares in the public markets. That is Facebook's core business. That is its raison d'etre as they say in Latin. This is a company created by, for and about venture capitalists. It's not a company so much as it's a narrative. A fable. A fairy tale."
* Good work by Duncan to have the whole blogosphere chattering away about rules of a startup, I cant wait till Duncan does his next impending I hope startup. He certainly gets his point out there. As does Mr workaholic Calacanis (to which id say most ppl luv working at a company that gives u a 24" imac and 2 dell/aapl monitors as your workstation) I think we need a smackdown calacaniscast : riley vs calacanis. i'd pay to listen to that :)
Cuban's take I much prefer, in one of his rules for a startup : "Sales Cures All. Know how your company will make money and how you will actually make sales." We've just updated our IM (ping if u want a copy money folk reading this) and its great to see quarterly revenue numbers doubling+ for the last 3 quarters. The lesson though was we had to be able to fight and setup the building blocks over 3 years.
So revenue in a startup is key, but dont think that your excel model that says it will happen in year 1 or even year 2 is accurate. And alot of startups dont give themselves enough oxygen (money + time) to be able to prove if there is a viable business model there. So once u miss your earlystage hockeystick projections its game over before it started, if u raised not enough money or set the wrong expectations with investors and triggered one of those shareholder agreement clauses u glossed over when taking the money.
The other lesson is that once you start generating real revenue it becomes even more dangerous to manage cashflow month to month, as accounts receivable blows out, payroll goes out, and you have a net negative gap u need to be able to manage.
As Tony Wright says via a vc; "You’ll think you are on the verge of death early and often, but you aren’t– and you can make it through if you start with an idea that people want and keep working on #1." ("# Build something people want. This will make or break you. Period. The success of your idea is a function of how much people want it and how many people want it. Make your product better on this front every single week. Every single DAY, if you can. Everything else is a distraction.")
The Fake Steve Jobs was funny tho on this topic* (as it applies to Facebook's raison d'etre) : "Facebook is a vehicle through which a bunch of investors in the Valley hope to turn a small pile of money into a much bigger pile of money by selling shares in the public markets. That is Facebook's core business. That is its raison d'etre as they say in Latin. This is a company created by, for and about venture capitalists. It's not a company so much as it's a narrative. A fable. A fairy tale."
* Good work by Duncan to have the whole blogosphere chattering away about rules of a startup, I cant wait till Duncan does his next impending I hope startup. He certainly gets his point out there. As does Mr workaholic Calacanis (to which id say most ppl luv working at a company that gives u a 24" imac and 2 dell/aapl monitors as your workstation) I think we need a smackdown calacaniscast : riley vs calacanis. i'd pay to listen to that :)
posted by redbarren at 2:05 PM
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