I’m giving a speech tomorrow at the Founder Showcase in Santa Clara. The topic is around building revenue for startups. The slides are here:
These build on a prior talk I gave in 2009 on this topic, and I’m looking forward to it.
To give my cliff notes here of the speech, it’s basically:
Revenue is the lifeblood, getting to revenue is nice, very nice.
Some advise not to think about revenue too early on in the life of a startup. The thinking goes: focus entirely on building something great, get an audience, then the revenue pieces will start to work themselves out. I disagree with this philosophy in part.
I totally agree with the idea that 100% of your focus needs to be on building something people want and driving to iterate, iterate, iterate. At the same time, I advocate thinking about revenue–at least a little bit–early in the lifecycle of starting a company. Don’t get derailed, but at the same time, don’t avoid the topic entirely. My rationale is simple—you never know what small thing will someday be the determiner of success or failure, so thinking about something important like revenue is a good thing to at least wrap your head around.
The talk then goes into two parts. Part 1 is about building out a business to think about how you’ll establish moats and drive traction. This is about defensibility in part; its also, however about driving distribution (at least in internet businesses). I argue that any founder should likely try to draw out the model that I’m advocating here—may not be relevant to you, but I’d think you’d at least want to try.
Then Part II is about models. I’ll talk about my thoughts on types of revenue models, a sort of revenue model 101. Nothing too revolutionary here, but hopefully a useful primer if you’ve not thought through a business model before. I then finish off with a brief description of how to think about your market as a whole. An industry or market model, i.e., the macro picture of the environment in which you operate is something that entrepreneurs will very likely need to be able to grasp and exercise their minds about. I’ll provide some quick thoughts on how I view that as working well and not well.
Hope to see you there!