Switch Your Role
3:30am, Jul 11, 2012 (America/Los_Angeles)
Singapore Summer 2012
Beyond revenues, costs, and profits: Writing the equation of your company in customer-centric terms
Content, Context, Connect'n, Conversat'n
Mentors
Company-Building Work
Deadline:
5:13pm, Jul 18, 2012
Below is the assignment for Part 2 of the session. The requirement for Part 1 is to be curious and come with an open mind! First, identify a list of at least 3 potential revenue streams for your business based on revenues of competing or related businesses. Second, write one paragraph that identifies the paying customer for each revenue stream, explains the benefit that you plan to provide the customer. Third, write a second paragraph for each stream that describes in detail the steps that are required from the very beginning of the customer relationship to when a payment is received, based on your research. Fourth, evaluate the revenue streams based on complexity and size, and select only one revenue model for your business. Fifth, write one paragraph on each of two, 3 or 4 assumptions based on the steps to revenue that must occur before you receive revenue, such as “Need a Critical Mass of User Traffic.” Sixth, convert this written logic into a 36 month revenue plan. In the plan, itemize each of your assumptions and scale them over time using a spreadsheet variable that you can change. Seventh, identify your costs that scale with revenues, referred to your cost of goods sold, such as server resources, variable headcount and commissions. Add these to the model and scale them with the growth assumptions. Eight, identify your fixed costs, such as legal, rent and support, and run them over the 36 months of the plan, thereby completing your first financial model. Ninth, paste the appropriate version of your new financial model into a well prepared Board package for the next year, and include a link to the document. See Board package samples on the Course Detail page. Tenth, update your company profile on the Founder Institute site with the new information. ASSIGNMENT GOAL: Develop a defensible financial model for one revenue stream.
Resources
Core Program Guides
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Revenue Steps Guide: https://fi.co/guides/731
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How to determine your steps to revenue
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FI Revenue Model Template: https://fi-hatchbox-production-uploads.s3.amazonaws.com/resources/fi-revenue-model-template-simple-document-2015-09-24.xlsx
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Spreadsheet to list Revenues and Expenses assumptions over the next two years
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FI Project Analysis Spreadsheet: https://fi-hatchbox-production-uploads.s3.amazonaws.com/resources/fi-project-analysis-spreadsheet-document-2015-09-24.xlsx
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Identifying if a project is worth pursuing
Revenue and Business Models
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Startup Revenue Models: https://youtu.be/nXvITZVflGM
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The 14 revenues models used by successful technology companies
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The 10 Most Popular Startup Revenue Models: https://fi.co/insight/the-10-most-popular-startup-revenue-models
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Useful for software, hardware, and physical products
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Business Model Guide: https://www.ycombinator.com/library/Gh-business-model-guide
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A list of business models that can be easily translated into revenue models.
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High-dollar vs High-Volume Revenue Models: http://christophjanz.blogspot.com/2014/10/five-ways-to-build-100-million-business.html
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The classic example of identifying the pricing vs volume requirements to building a $100M business
How to Price Your Product or Service
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Startup Pricing 101: How to Price Your Early-Stage Startup Product (Video): https://youtu.be/JEZ6jKE1610
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Effectively pricing products regardless of revenue strategy
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Pricing Your Product: https://articles.sequoiacap.com/pricing-your-product
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Strategies on setting your price and how to increase perceived value
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Pricing Surveys: Different Types and How to Use Them: https://www.surveymonkey.com/market-research/resources/pricing-surveys/
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Quickly determine your target market’s willingness to pay
How to Charge Money for Something When it Doesn’t Exist Yet
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Sell First and Then Build: https://blog.close.com/how-to-charge-money-for-things-that-dont-exist-yet/
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Script for asking for the purchase before your product is ready
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Proven Strategies to Pre-Sell your Idea: https://www.failory.com/blog/how-to-pre-sell-your-saas
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Using mockups and early adopters to generate early sales
Startup Metrics
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Startup Metrics for Pirates: https://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-sf-jan-2010
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The definitive acquisition metrics for SaaS companies
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16 Startup Metrics: https://a16z.com/2015/08/21/16-metrics/
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Using metrics to gauge the success of your business
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Comprehensive List of Key Performance Indicators: https://www.optimizesmart.com/understanding-key-performance-indicators-kpis-just-like-that/
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What is a KPI plus definitions of many different KPIs
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SaaS Metrics Guide: https://fi-hatchbox-production-uploads.s3.amazonaws.com/drive/SaaS-Metrics_Guide.pdf
Using Revenue Models in Your Startup
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How to Leverage a Financial Model to Supercharge your Business (Video): https://youtu.be/yEpE6V0_rLw
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Using your revenue model to make quantitative decisions in your business
Relevant Partners
See all partners at FI.co/partners.
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Stripe: https://fi.co/resources/31025
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Up to $20,000 of fee-free payment processing
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HubSpot: https://fi.co/resources/17371
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Up to $40,000 in savings, 90% off entire Growth Suite, including Marketing, Sales, and Customer Service Software
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Forecastr Revenue Model: https://fi.co/resources/35282
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25% off first year subscription
Session Media
Watch session media