revenue and customers: development approach

Revenue and CustomersDevelopment Approach

The Founder Institute1 Oct ’13

by Raphael Costa (@raphacosta)

Revenue & Customers

The Startup Culture

Steps To Develop Your Revenue Model

Cash Creation vs. Value Creation

Your Customers & Your Startup

Reality Check

Background

Q & A

Why do most Startups fail?

Background

A family man

A software developer by trade

A startup enthusiast

Co-Founder & Director of Hashtag Consulting

Co-Founder & CEO of AdTangerine

@raphacosta

http://za.linkedin.com/in/raphacosta

https://www.facebook.com/raphael.costa





Up Next

Startup Culture

The Startup Culture

Why a Startup?

Why you should be a Startup Founder?

Why you shouldn’t be a Startup Founder?

What could we expect from a Startup?

What are the needs of a Startup?

How can a Startup raise funds?

Up Next

Why do Most Startups Fail?

Why Do Most Startups Fail?

Business Model based on Assumptions

Lack of Effective Marketing Strategies

Lack of Investment

Lack of Mentorship

Lack of Vision

Stupid Idea built in isolation

It’s no longer fun or driven by passion

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Knowledge of your customer base

Knowledge of the MarketWhere is the GAP?

What is the NEED?

How things are done? (Processes)

Who are they?

What they do?

What is their context?

How much do competitors charge for similar products?

How does your product fit in?

What do they need?


Supporting Tools for DiscoveryAnalytics

Split Tests (A/B)

Knowledge of your Product

Strengths

Weaknesses

Cost of Production

Cost to Market

Cost to Maintain

Others

What makes your product unique?

Up Next

Reality Check (CHASM)

Reality Check (Chasm)

What do your customers expect from you?

What do you expect from your customers?

What do investors expect from you?

What do you need to survive?

Customer:“Your idea is awesome, but it just doesn’t work for me. I’m sorry.”

Investor:“I like the concept, but I don’t see how I can make money here?”

You:“What’s my real cost here? How long can we survive?”

Reality Check (Chasm)

Reality Check (Customers)

INNOVATORSThey are willing to take a risk on a good idea.

EARLY ADOPTERSThey wait to hear a few good stories

EARLY MAJORITYThey need solid evidence

LATE MAJORITYThey want to see at least 3 product success stories.

LAGGARDSThey wants solid proof that it works

Customer Classification

Short CLV, Low CAC

Medium CLV, Low CAC

Medium CLV, Medium CAC

High CLV, Medium CAC

High CLV, High CAC

CLV = Customer Lifetime Value

CAC = Customer Acquisition Cost

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Pressure

Quality Decline

Cash over Innovation

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"In the absence of revenue, there can be no profit... and many other things."

Choose a revenue model approach that is best for your company and background.

Your revenue model should allow you to communicate your value.

Identify potential investors strategically based on your revenue model.

Project out into the foreseeable future.

Understand that your revenue model is always evolving.

Identify the key variables for your company.

Mitigate for variables


DISCOVERY QUESTIONS

What revenue model do your competitors use?

How do your customers like to pay for a solution like yours?

What are your costs and at what frequency? (Monthly, Weekly, Annually)

Thanks!

@raphacosta



Revenue and CustomersDevelopment Approach

QA





Background