Entrepreneur. Vc. Zivity. 5 Essential Things to Do When Deciding On Your Business Idea. #1 - Consider “Allowable Acquisition Costs” (AAC) - The math here isn’t rocket science but many people fail to get the concept right when they start a company. Here’s how it works. Take the amount of profit (not revenue!) That you can reasonably expect to receive over the lifetime of a customer. For example, if you sell a subscription product that is $10/month with a profit margin of 40% and the average person stays subscribed for 8 months then the total lifetime value to you of that customer is $32 ($10 * 0.40 * 8). You still have to go a step further here though and do a Net Present Value analysis ( ).
The higher the Allowable Acquisition Costs the more ammunition you have to acquire customers. . #2 - Spend a lot of time doing customer development in the early stages - I met recently with an entrepreneur who hasn’t officially started his company yet but is out interviewing all sorts of people about his idea. Don’t make that mistake. Keep project and personal metrics closely tied - rahfeedback's posterous. Getting Lean: How to iterate your web application to product/market fit. Corner Office - Mark Pincus - Every Worker Should Be C.E.O. of Something - Interview. Q. What are the most important leadership lessons you’ve learned? A. If I was going all the way back, it would be playing on my school’s soccer team, because we were on the same team together, most of us for eight or nine years, and we were at a really little school in Chicago that had no chance of really fielding any great athletes.
But we ended up doing really well as a team, and we made it to the state quarterfinals, and it was all because of teamwork. And the one thing I learned from that was that I actually could tell what someone would be like in business, based on how they played on the soccer field. So even today when I play in Sunday-morning soccer games, I can literally spot the people who’d probably be good managers and good people to hire. Q. A. So I’d rather be on a team that has no bad people than a team with stars. And are you a playmaker? Q. A. And that, to me, is a huge amount of what it means to manage. Q. A. Q. A. Q. A. Q. A. Q. A. Q. A. Q. Should Your Startup Have an Advisory Board? This is part of my ongoing series Startup Advice. Many startup companies hire advisory boards. It’s very tempting. It’s mostly done by first-time entrepreneurs who want to persuade (bribe?)
Prominent industry luminaries to be closely associated with the company. It’s done partly in hopes of gaining their wisdom but it’s also done to portray the company in a positive light through association. So do advisory boards really add value? And if you decide to have one how do you best implement it? In my experience most advisory boards under deliver relative to expectations. If you plan to set one up – no problem. Advisory Board Problems: There are several problems that I have encountered myself and in my many discussions with CEO’s who have set up advisory boards. 1. 2. 3. You prepare materials for them the remaining advisers to read through. 4. My view on how to best implement advisory boards: If you do decide to set up an advisory board, here are my tips for how to do it the right way. 1. 2. 3. What's the Secret Success of MINT.com? The Real Numbers Behind Aaron Patzer's Growth Strategy.
Aaron Patzer, CEO of MINT.com, dropped by The Funded and Vator.tv's Juice Pitcher tonight to share some secrets of the company's success. (Just in case you don't plug the TechCrunch feed directly into your brain stem: MINT is the wildly successful, soon-to-be-acquired-by-Intuit, #1 personal finance site...and oh yes, full disclosure that First Round Capital is a thrilled investor.) Everyone knows that MINT has a great product, but few know the strategic moves. To the point, what did it take to get there?
How much did it cost to get started? When and how was it smart to raise money such that both the founder and the investors walked away happy? Aaron opened up MINT.com's books - and his old slide decks - tonight to share some shockingly frank details with the startups in attendance. Even more generously, he was happy to have his lessons be blogged for a more public audience: The straight shot: Why should you raise money, and how much? Garage Phase: What are the costs and milestones? Starting Bands or Small Restaurants | Modern Folk. The Seven Best Small-Business Websites You've Never Heard Of-Minyanville. There are many trade magazines devoted to small business, but each comes with the long production cycle and high overhead that's killing the dead-tree media.
In the letters to the editor or forum section of a magazine, readers shout out a problem and strain for a reply weeks or months later. But information is moving faster and cost is coming down, thanks to electrons. Increasing numbers of entrepreneurs are turning to the Internet to swap information, solve problems and expand their business. Though everyone has heard of LinkedIn, Twitter, and Facebook, a number of social-networking sites exclusively devoted to small business may soon outpace print as a way for entrepreneurs to meet, greet, and expand, the New York Times reports. The new communication channels are fast, targeted, and generally free - call it power to the grassroots.
About 260,000 entrepreneurs currently use social-networking sites to promote their businesses, suggesting solid growth ahead. 1. 2. 3. 4. 6. 7. 10 Free or Cheap Tools for Start-ups. Every start-up founder uses free or inexpensive online resources to get his or her company launched. Chadd Bennett of RetroRazor, a Seattle-based company that sells old-fashioned safety razors, provided us with a list of the tools he found to be the most helpful. First up, he recommends a CRM application. “Until recently, we used a Google spreadsheet to keep track of the retailers buying our razors," Bennett says. "But we just started using a program called Zoho CRM.
I chose it because up to three people on each account can use it for free. Plus, it’s established enough that I don’t think it’s going to disappear. We only use it for our retail clients, not for individual customers, because we have hundreds of them and it would take too long to enter their information into the database.” “Dropbox is a virtual hard drive, but it doesn’t just store your files; it syncs them as well," Bennett says. “Now that I’ve found Dropbox, I don’t use Google Docs as much as I used to.
What to do if your startup is about fail (or “Don’t Stop Believing”) [Jason Calacanis Article] | Ramamia Company Blog. VC Confidential: What Compensation Should You Give Your Team? One of the most popular search topics on my blog has always been compensation. I thought I would lay out historically the average benchmarks with some caveats. The first caveat is that these numbers will be skewed more towards an early/expansion stage company versus a start-up or late stage companies. The second is that with conditions worsening, a lot of companies are going to need to ask employees to take across the board pay cuts (usually in exchange for some equity) to stretch the runway out.
The third is that these are non-founders stats. Founders will have much higher equity and lower salary. CEO (non-founder)Salary $180-200k, bonus $50k+, equity around 5-7% CMOSalary $150-175k, bonus $50-75k, equity around 2% COO/CFOSalary $150-$175k, bonus $50k, equity 1-1.5% VP, SalesSalary $150k, bonus tied to sales (usually in the $50-75k+ range), equity of 1-2% Other VP spotsSalary $140-150k, bonus $25-50k, equity 0.75-1% Director and belowThe market will dictate these. The Next Net. Sensemaking: Social Arbitrage: The New New Path to Abnormal Returns. Jeff Bezos was not a dissatisfied customer.
He didn't start Amazon because he could never find what he was looking for. It wasn't because of poor staff recommendations. Nor did he just plain hate leaving the house. Bezos wanted to take over online retailing, and he used the skills he gained as a quant trader to do it. Amazon sold books not because Bezos was dissatisfied with the qualitative experience of bookstores, but because his analysis identified books as an arbitrage opportunity. And it worked. But that opportunity is gone. So what's next? Back in 1995 the biggest websites were all tools: Amazon, eBay, Yahoo! Today, all the good tools already been taken. And in order of importance, what each tool does is less important than the social interaction that goes on around them.
Don't believe me? As tools, all of these predecessors worked as well or better than Flickr. So, what does it all mean? That's right, I said it: design. Look around and you'll see a lot of mistakes being made. Entrepreneurial Success. The Top Ten Stupid Ways to Hinder Market Adoption. Here’s a compilation of silly and stupid ways companies are hindering adoption of their products and services. I must admit, some of the companies that I’ve invested in have made these mistakes—in fact, that’s why I know these mistakes are (a) silly; (b) stupid; and (c) hinder adoption.
Enforced immediate registration. Requiring a new user to register and provide a modicum of information is a reasonable request—I just think you should do it after you’ve sucked the person in. Most sites require that registration is the first step, and this puts a barrier in front of adoption. At the very least, companies could ask for name and email address but not require it until a later time. Test: Can people communicate your site’s URLs to others over the phone?
Extra credit: People using Verizon and can do this despite its coverage. Windows that don’t generate URLs. Unreadable confirmation codes. Competitious. 2006 Startup School.