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This is part of a series on sales & marketing. I previously covered how early phase sales teams should be “evangelical&# and consultative in nature. The first post on scaling sales dealt with “aiming&# your sales teams – making sure they were focused on the right opportunities.
There has been a lot of public debate over the past several weeks about whether it’s a good thing to be “gross margin positive” or not and commentary always reminds me that some people at startups don’t quite understand financial metrics or even how to think about which ones are healthy. Gross margin positive !=
The most obvious way to explain this is with sales people. If you hire 6 sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business for 4-6 months. “COGS” represents the amount that each sale costs you.
What I’m talking about here is a level of discipline and skill necessary to collect and analyze the relevant business data, known as metrics. As the end of the year approaches, it’s a good time for every startup to assess the metrics, technology, and platforms they’re using to manage the business. Cost of customer acquisition.
What I’m talking about here is a level of discipline and skill necessary to collect and analyze the relevant business data, known as metrics. Here is my selection of ten key metrics that every six-sigma joint like GE tracks without thinking, but too many small businesses only monitor haphazardly, if at all: Sales revenue.
2 preamble issues having read the comments on TC today: 1: I know that the prices of startup companies is much great in Silicon Valley than in smaller towns / less tech focused areas in the US and the US prices higher than many foreign markets. You can be pissed off, but I don’t set prices. That’s stupid.
And then they said one thing that most marketers go their whole career never hearing, 'Listen Steve, price is irrelevant, it is speed that matters.' We had been pricing our graphics cards to be a low-cost provider. The first thing I did was raise our prices.". the VP of Sales the richest person in the company.
On the other hand, the biggest winners will turn out to be much larger than the prices people paid for them and this will happen faster than at any time in human history. However, to be a great VC you have to hold two conflicting ideas in your head at the same time.
Put simply – you need enough users in a segment who care about what you’re doing to dictate investing further in the product or in sales & marketing resources. One of the things I have observed over the years is that a hard charging sales oriented founder/CEO can often hide the defects in a product. Like DeviantArt.
Most struggle with the idea and practice of marketing and sales, and see these as a necessary evil, if even required. Of course, for a price, there are many marketing organizations and gurus willing to come to your aid. entrepreneur startup metrics marketing sales business' Attract and get found by the right prospects.
A “warrant&# is a right, but not an obligation for a company to buy stock in your company at a future date and at a pre-agreed price. If you simply to a revenue number (say hitting $1 million in sales) and they hit it in year 1 then you’ve lost your carrot for year 2. million in sales. million in sales (e.g.
We spoke with CEO and co-founder Spencer Price to learn more about the company. Spencer Price: Halla is the only software company to dynamically profile human tastes so we can help people make better choices. Spencer Price: That's a fair question. Spencer Price: It's a bit of a circuitous route. What is Halla?
" Revenue doesn't pay your bills, GM does — @msuster 2/ Founders obsess with revenue as a vanity metric. But if you raise at too high a price you make it harder to raise next round. But if you want to add some in the comments section on Medium and I’ll make sure to read them.
Proof of any business model starts with a finished product or solution, sold to a new customer for full price, with high satisfaction for the value received. Decide early where and when money will come from, set some milestones and metrics, and work to a plan, or be caught short. Word of mouth is not adequate for marketing and sales.
Switch your attention from product development to sales. Second-stage growth usually requires a formal sales model, an experienced and disciplined sales team, and a well-defined process to meet your new goals and demands. Managing business growth is more than metrics. Separate marketing from sales for further leverage.
He eventually applied his lessons learned in these experiences when he founded Zag, a company that helps consumers buy cars over the Internet at pre-negotiated prices with nearly 4,000 dealers across the country [disclosure: my firm GRP Partners is an investor in Zag]. It’s awesome. The deals we quickly went through are: 1. Foursquare.
When sales fall off, you need to dig deep for the “why,” rather than just assuming the price needs to go down. Establish and evaluate metrics at multiple levels. In addition to total sales, you need to look at categories and trends at lower levels. Scan for unmet needs to match new products.
The minute you try to monetize now they have metrics with which to beat you up and say you’re business has limitations.” And if your ultimate strategy is a small sale of the business that recovers investment and puts some cash in your pocket – having more time to make this work makes a lot of sense.
Often board members themselves don’t do the work to say “what metrics would we like to see.” Any great board member should tell you, “please don’t create any performance metrics or materials that analyze the business that you’re not already creating for your own management’s use.” Sometimes they don’t even know.
That should make you wonder - how do you measure traction in a metric? While thinking about the parameters of traction, and how to measure it, I was impressed with a new book, “ Scaling Lean: Mastering the Key Metrics for Startup Growth ” by Ash Maurya, a serial entrepreneur, and creator of the one-page business modelling tool Lean Canvas.
For example, I commonly see metrics to keep track of revenue per employee, overtime, and absenteeism, but I don’t often see measures of overall customer satisfaction with individual employees. Incentives should be a combination of metrics and recognition to highlight results. Incent and reward employees who delight customers.
For those patient enough to source great companies at reasonable prices and prepared to weather the next inevitable downturn, I believe firmly there will be economic rewards for discipline and patience. They compete on features, price and execution. Bottom of the sales funnel. Some will pay off, others will not. Morning in VC.
In the case of MakeSpace we had huge initial successes in New York City as Rahul led the scaling of our drivers, our trucks and our warehouses and we figured out the right price points to beat the local competition. presented pricing challenges when compared to a whole new set of offline competitors we didn’t know well.
Obviously this definition is generic, so my first recommendation is that you take the lead in defining traction metrics for your startup, and then selling your results convincingly to investors. As an investor, I would like to see one month of sales, and see how that compares to your projections.
Switch your focus from product development to sales. Explosive growth to an enterprise normally requires a scalable sales model, a well-documented process with incentives, training, and metrics for tracking and management. Isolate marketing from sales for maximum customer focus.
Your focus for momentum could be sales, profitability, or number of customers, but trying to keep all possible parameters growing is simply not practical. It’s important to define your growth strategy, document it, communicate it to your team, and align metrics and employee rewards to target goals.
I’m sure all you accountants will agree that fixing the mistakes listed here does not require rocket science, but I’ve seen them so often that to be forewarned is to be forearmed: Failing to factor in fixed costs when pricing. Always use a break-even analysis to measure what volume and price are required to offset total costs.
It freed up Ophir to grow out our sales organization, to work more closely with agencies, to innovate on product and to raise capital. They can help you with pricing. The last thing you want the CEO (or heads of sales, marketing, product) doing is sinking 3 days every month into preparing board packs. Timing of cash payments.
If you have had to pivot from the consumer market to enterprise customers, that requires new pricing models and new sales channels. Re-evaluate processes as they are today and set metrics to better represent the new sales, operational, and service needs. Communicate, communicate, communicate.
Proof of any business model starts with a finished product or solution, sold to a new customer for full price, with high satisfaction for the value received. Decide early where and when money will come from, set some milestones and metrics, and work to a plan, or be caught short. Word of mouth is not adequate for marketing and sales.
Switch your attention from product development to sales. Second-stage growth usually requires a formal sales model, an experienced and disciplined sales team, and a well-defined process to meet your new goals and demands. Managing business growth is more than metrics. Separate marketing from sales for further leverage.
Proof of any business model starts with a finished product or solution, sold to a new customer for full price, with high satisfaction for the value received. Decide early where and when money will come from, set some milestones and metrics, and work to a plan, or be caught short. Word of mouth is not adequate for marketing and sales.
Have you set the right price for your entree, and correctly included all costs? Have you projected sales and marketing costs, cash flow, and capital requirements? Develop metrics with which to measure yourself and use these to incrementally expand and improve your offering as fast as the market and capital will allow.
They came on, because right now, their sales go entirely to me, even though they know there are women who have money, who are eager to seek out adrenaline sports, and why shouldn't they also drive fast cars? Tara Weingarten: We had no metrics when we started, and even now, we had a big week with 1900 uniques on one day.
In fact, a business plan is needed more by you than investors, as the blueprint for your company, team communication, and progress metrics. Marketing, sales, and partners. Describe your market penetration strategy, sales channels, pricing, and strategic partnerships. Financial forecast and metrics.
In fact, a business plan is needed more by you than investors, as the blueprint for your company, team communication, and progress metrics. Marketing, sales, and partners. Describe your market penetration strategy, sales channels, pricing, and strategic partnerships. Financial forecast and metrics.
In this period (less than 2 years) he has brought on incredibly talented senior execs is sales, marketing, product management, client services, finance, vp engineering and more. Ask them for a meeting to review your pricing strategy with you. Growth like this, this early in a company’s lifecycle rarely happens. Already covered.
According to most investors I know, traction is some clear evidence that the “dogs are eating the dog food” – usually meaning that you have at least one customer paying full price for your solution. Define metrics on customer feedback and user counts. Count connections with experts, media, and influencers.
Obviously this definition is generic, so my first recommendation is that you take the lead in defining traction metrics for your startup, and then selling your results convincingly to investors. As an investor, I would like to see one month of sales, and see how that compares to your projections.
Switch your attention from product development to sales. Second-stage growth usually requires a formal sales model, an experienced and disciplined sales team, and a well-defined process to meet your new goals and demands. Managing business growth is more than metrics. Separate marketing from sales for further leverage.
For example, if it’s getting harder to charge a price premium for the product you’re marketing, or others are offering your subscription service for free, it may be time to start thinking in a new box. Another example is seeing substitute versions of a product, like eBooks, for a low price displacing hardcover books.
Entrepreneurs need to document a process of responding to a market need, sizing opportunity, assigning a specific business model, and planning for marketing, sales, and customer satisfaction. For progress and success assessment, each of these needs some metrics defined, a training plan, and responsibility assignments within your team.
Switch your attention from product development to sales. Second-stage growth usually requires a formal sales model, an experienced and disciplined sales team, and a well-defined process to meet your new goals and demands. Managing business growth is more than metrics. Separate marketing from sales for further leverage.
The problem is that stakeholders, like marketing and sales, don’t know what the latest version of the roadmap is. Greathouse: Having run these groups, I know all about the inherent friction between sales and marketing with regard to lead quality, volume, etc., Metrics related to customer acquisition, lifetime value and churn.
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