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How to Make Wealth

How to Make Wealth
May 2004 (This essay was originally published in Hackers & Painters.) If you wanted to get rich, how would you do it? I think your best bet would be to start or join a startup. That's been a reliable way to get rich for hundreds of years. Startups usually involve technology, so much so that the phrase "high-tech startup" is almost redundant. Lots of people get rich knowing nothing more than that. The Proposition Economically, you can think of a startup as a way to compress your whole working life into a few years. Here is a brief sketch of the economic proposition. Like all back-of-the-envelope calculations, this one has a lot of wiggle room. If $3 million a year seems high, remember that we're talking about the limit case: the case where you not only have zero leisure time but indeed work so hard that you endanger your health. Startups are not magic. Millions, not Billions If $3 million a year seems high to some people, it will seem low to others. Money Is Not Wealth The Pie Fallacy Related:  market

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What’s A Startup? First Principles. Success consists of going from failure to failure without loss of enthusiasm. Winston Churchill Everyone knows what a startup is for – don’t they? In this post we’re going to offer a new definition of why startups exist: a startup is an organization formed to search for a repeatable and scalable business model. A Business ModelOk, but what is a business model? A business model describes how your company creates, delivers and captures value. Or in English: A business model describes how your company makes money. Think of a business model as a drawing that shows all the flows between the different parts of your company. While this is a mouthful, it’s a lot easier to draw. Drawing A Business ModelLots of people have been working on how to diagram and draw a business. Alexander Osterwalder's Business Model Template (At Stanford, Ann Miura-Ko and I have been working on a simplified Silicon Valley version of this model. But What Does a Business Model Have to Do With My Startup? Stay tuned.

Collaboration Business Plan Template | Info-Tech Research Group Access this Template/Policy by filling out your information below or by using your LinkedIn account. Already aMember? Login to get access. Not aMember? Sign up to get access. This template will help build a living social collaboration business plan for the organization. In addition to identifying roles and responsibilities, this template provides a framework in which to outline: Strategic and opportunity assessmentsRisk identificationProject recommendationsTechnology investments This tool is intended for both an IT and business audience.

SaaS Metrics 2.0 - Detailed Definitions Intro This page is a supplement to the the SaaS Metrics 2.0 blog post. It provides detailed definitions for each of the key metrics used in that post. Calculating LTV and CAC for a SaaS startup Unit Economics is a very powerful way to analyze the long term profitability of a SaaS business. I am often asked for the details of how to compute the various elements, such as CAC and LTV. CAC – Cost to Acquire a Customer CAC is defined as follows: There is a problem with using this formula in the early days, as you may several expensive people in the team that should scale to handle a far number of customers as you grow. Customer Lifetime If you start with a cohort of 100 customers and apply a constant churn rate every month, you’ll get an exponential decay, as shown in the following graph (which uses a 3% monthly churn rate): Mathematically this can be simplified to the following formula to find the average Customer Lifetime: Lifetime Value of Customer which can also be expressed as follows:

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