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8/20/2019 Jill Stelfox Slides
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Founders Institute
Revenue
Jill Stelfox
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Good Versus Cash
Your product cancompletely SUCK and you
can make money!
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It is a race
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Revenue
• Lifeblood of your company
This is your FUEL
• Sales deliver revenue
It will be chaotic
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Product & Service
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Easily Comparable Products &Services areEasily Price Comparable
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Monetize Quicly
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Monetize Quicly
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Viable!
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Sales- CostsPositive Number = YesNegative Number = No
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Ho !ar are you !rom Cash"
Product
"Service
Money
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Ho !ar are you !rom Cash"
The more comple# you ma$e%
the harder it is to ma$e money&
# S$EPS
%dvertisin
Visitors Money
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%ccountin is borin' ' 'until it(s your money
• )alance vs' *o+
• $he basic ,nancial statements
' Income statement- revenue and e.penses
' )alance sheet- assets/ liabilities/ e0uity
' Cash *o+ statement11- ho+ much did yourcash chane and +hy
• Income or loss
• $imin/ e''/ accounts payable or receivable
• Investment
' Someone else invested in you 2e0uity3
' 4ou invested in assets 2capital e.penditures3
((most important and least understood
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5ther terms you(ll hear
Run rate- ' % metric as o6 a point in time e.trapolated to an annual 6uture
rate
E.ample- you have annual revenue o6 78m in 9:8;/ 7<:: o6 +hich +as
in =ecember'
Revenue run rate is 7<'>m"year 27<::"mo 6or 89 months3
' ?hat the business should do ne.t year based on most recentperiod results
' =i@erent 6rom proAections +hich assume additional chanesover the course o6 the comin year 2e'' addin more sales people/
additional customers/ etc'3
)urn or burn rate ' Bo+ much cash your business is consumin
' Can be used in combination +ith run rate
E.ample- you used 7;:: o6 cash in 9:8; and 7; in =ecember' 4our
cash burn has a run rate o6 7D:: 27; . 893
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$hose Pesy Revenue Models
• =e,nition- +hy do customers ive you money• Sinle most important thin to no+ or ,ure
out about your business
• % ood revenue model is- ' Speci,csee 6ollo+in list
' Scalable
' %@ordable
'Measurable"proAectable
• Get one that +ors be6ore you e.pand into
others
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?eb"mobile revenue models p8
Advertising•Display Ads - ex. Yahoo!
• Search Ads - ex. Google• Text Ads - ex. Google• Video Ads - ex. Hulu• Audio Ads - ex. Pandora• Promoted Content - ex. Twitter,Tumblr
• Paid content links - ex. Outbrain• Recruitment Ads - ex. LinkedIn
• Lead Generation - ex.MoneySuperMarket, ZocDoc
• Affiliate Fees - ex. Amazon AffiliateProgram
• Classifieds - ex. Craiglist• Featured listings - e.g. Yelp, SuperPages;
• Email Ads - as done by Yahoo,MSN
• Ad Retargeting - ex. Criteo• Real-time Intent Ad Delivery• Location-based offers - ex/Foursquare
• Sponsorships / Site Takeovers - ex.Pandora
• Wait time screenfillers e.g.Wetransfer.com
• Sponsored transaction(bank/loyalty) statements ex. VEMT
Subscription•Software as a Service (SAAS) - ex.Salesforce
• Service as a Service - ex. Shopify• Content as a Service - ex: Spotify,Netflix
• Infrastructure/Platform As A Service -ex. AWS
• Freemium SAAS - ex. Dropbox• Donations - ex. Wikipedia
• Sampling - ex Birchbox• Membership Services - ex AmazonPrime
• Support and Maintenance - ex 10gen,Red Hat
• Paywall - ex. NYTimes• Voice and video-conferencing - ex.Uberconference
Peer to Peer• Peer-to-Peer Lending - ex. LendingClub,
• Peer-to-Peer Gambling - ex. BetFair• Peer-to-peer buying - ex Etsy• Peer-to-peer insurance/home/car - ex(??)
• Peer-to-peer computing (CrasPlanstorage, or SETI@home)
• Peer-to-peer service - ex. MechanicalTurk, TaskRabbit
• Peer-to-peer Mobile WiFi/Tethering - ex
Commerce•Retailing - ex. Zappos
• Marketplace - ex. Etsy• Crowdsourced Marketplace - ex.Threadless
• Excess Capacity Markets - Uber,AirBnB
• Vertically Integrated Commerce -ex. Warby Parker
• Aggregator - ex. Lastminute.com
• Flash Sales: Gilt Groupe, VentePrivee
• Group buying - ex. Groupon• Digital goods / downloads - ex.iTunes
• Virtual goods - ex. Zynga• Training - ex. Cloudera (??), ->Coursera
• Pay what you want - ex.
Radiohead• Commission - ex. SharesPost• Commission per order - ex.Seamless, GrubHub
• Auction - ex. eBay• Reverse Auction - ex Priceline• Barter for services ex. SwapRight
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?eb"mobile revenue models p9
Mobile•
Paid App Downloads - ex.WhatsApp
• In-app purchases - ex. ZyngaPoker
• In-app subscriptions - ex. NYTimes app
• Advertising - ex. Flurry, AdMob• Digital-to-physical - ex. RedStamp, Postagram
Gaming• Freemium - Free to play w/virtual currency - ex. Zynga
• Subscription- ex. World ofWarcraft
• Premium - ex. xBox games• DLC - (Downloadable Content)- ex. Call of Duty
• Ad Supported - ex -
addictinggames.com
SubscriptionTransaction
processing• Merchant Acquiring - ex. PayPal(Online / Offline), Stripe (Online),Square (Offline)
• Intermediary - ex. IP Commerce(POS 2.0), CardSpring
• Acquiring Processing - ex.Paymentech
• Bank Transfer - ex. Dwolla
• Bank Depository Offering - ex.Simple, Movenbank (spread onaverage deposits)
• Bank Card Issuance - ex. Simple(interchange fee per transaction)
• Fullfilment - ex. Amazon• Messaging - ex. Peer-to-PeerSMS, IM, Group Messaging
• Telephony - ex.
termination/origination in publictelephony networks (skype out/in)
• Telephony - ex.termination/origination withinprivate telephony cloud (e.g.native skype)
• Payment Gateways: Mobile -ex.Braintree
• Platform Monetization ("Tax") -Facebook Credits; iO6 30% cut.
Licensing•
Per Seat License - ex. Sencha• Per Device/Server License - ex.QlikView
• Per Application instance - ex. AdobePhotoshop
• Per Site License - ex. Private cloudon internal infrastructure
• Patent Licensing - ex. Qualcomm• Brand Licensing - ex. Sesame Street
• Indirect Licensing - ex. AppleVolume Purchasing
Data• User data - ex. BlueKai• Business data - ex. Duedil• User intelligence - ex. Yougov• Search Data - ex. Chango• Real-time Consumer Intent Data -ex. Yieldbot
• Benchmarking services - ex.Comscore
• Market research - ex. GLG
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Case Study )9) Biher Ed
• Phase I F Validate demand 2& inoreeconomics3 ' Secured 7#:: to build a prototype 2mvp3
' Identi,ed 8: pilot prospects #:H close rate2validated demand phase 83
' Secured 7;:: to e.tend to a usable beta andclosed initial sales +ith 9"# pilots
'Bired 8 sales rep/ closed ; deals
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Case Study )9) Biher Ed
• Phase II F Validate business model ' 7; initial order size/ 799 variable cost o6 customer
ac0uisition
Good lon term business but not scalable
' )rouht do+n cost o6 customer ac0uisition to 78:• Sales tools- ?ebe. meetins vs' onsite visits
• Implementation tools- Installers/ %V surveys/ documentation
' Increased averae initial order to 78:• # 6or 9 proramet # classrooms 6or the price o6 9
• >;H o6 customers bouht the bundle
' Variable cost no+ J initial revenue
' Secured commitment 6or 7#m"year 6rom investors tocover ,.ed costs 2development/ con6erences/ etc'3
' Scaled lie crazy<:: collees in # year
C St d )9C M bil S 6 t
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Case Study )9C Mobile Sa6etySolution
My MobileWatch Dog
Mobile
Spy/MobileNanny
VerionChaperone
Parent Portal
Koad proram on device over the air
Provide sinle vie+ & manaement o6 allyour 6amily(s mobile devices/ in one
place
Set Lp Parent oti,cations
%uthorize & monitor contacts to and byyour children
%llo+ parents to read messaes &pictures sent to device 6rom the portal
%llo+ parents to stop inappropriate te.tmessaes be6ore they arrive
%llo+ parents to stop te.t & picturemessaes by day and time automatically
)*
Core Dierentiator"?e actually stop the inappropriate behavior )EN5RE it reaches your children'
$hey only REP5R$ to you that it has already happened '
Core Dierentiator"?e actually stop the inappropriate behavior )EN5RE it reaches your children'
$hey only REP5R$ to you that it has already happened '
Case Stud )9C Mobile Sa6et
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Case Study )9C Mobile Sa6etySolution
Set Up #ee$ Monthly #eeContract%e&uire
d
Code D Mobile 79:"device 7D'D;"6amily"month
o
My Mobile ?atch=o
79;"device 7D'D;"device"month
o
Mobile Spy"Mobileanny
79;"device 79D'D;"9devices"month
4es F 84R
Verizon Chaperone one 7<'D;"6eature"dev
ice"month
4es F
PhoneContract
%$&$ )loc one 7<'D;"6eature"device"month
4es FPhone
Contract
Study +hat people +ill pay +ithout havin to reallycare
$here is no RIGB$ ans+er
Study +hat people +ill pay +ithout havin to reallycare
$here is no RIGB$ ans+er
Case Study )9C Mobile Sa6ety
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Case Study )9C Mobile Sa6etySolution
North 'merica Data ()*) ()** ()*(
O o6 6amilies +" children 288 to 8>3 in LS 2Census )ureau3 88</>::/::: 8#9/:9:/::: 8;8/>9#/:::
H o6 children 288 to 8>3 +ith data enabled mobiledevice 2Pe+ Institute3 #DH <#H <H
$otal addressable 6amilies <</9/::: ;/>/:: 8/#;/>8:
$otal %ddressable Maret 2%ssumin our pricin 7D'D;"mo3
;/#<;//>:: />/8:/><: >/;9:/::#/88<
O o6 6amilies in Code D Plan 9:/::: ;;/::: >;/:::
$otal ProAected Revenue 6or Code D27D'D;"Namily"Month3 79/;98/::: 7/>::/::: 78:/98/:::
H o6 Maret Share :':;H :'8:H :'89H
)+
eep itSIMPKE &
loical
eep itSIMPKE &
loical
ca n + t
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ca n + tPartners"Resellers
• Re6errals- ?e pay 8:H o6 MRR 2Monthly Recurrin Revenue F as revenue is received3 6or
the ,rst 89 months 6or re6errals means they brouht us the deal but +e did the sales+or/ contract and billin'
• Partners- ?e pay 8;#:H o6 MRR 6or deals closed by the partner 6or the li6e o6 the deal
varies based on +hat they are doin on deal' I6 they do $ier they et hih/ i6 +e do
everythin itTs the lo+er rane
• ?e are very selective about +ho can become your partner
' Nirst/ they must pay us a minimal monthly 6ee 6or the hiher commission"discount rane/ thisincludes 2one or more3-
• becomin a customer 2+hich may easier iven our service3
• main a ,rst sale +ithin D: days"usually comin to the relationship +ith a customer
' Second/ they must reister deals to et the hihest 6ee
' $hey must be actively involved in the account to continue to receive commission beyond year 8
• )est predictor 6or partners +ho produce 6or you are partners +ho are success6ully resellin
somethin else pre6erably other SaaS solution• Most o6 your partners +ill no+ #8: customers that are hih value/ hih probability sales'
Nocus on these +ith a plan F +orth the e@ort and ets them enaed early' Sell o@ the
partners strenth'
• Most UresellersU and UpartnersU donTt no+ ho+ to convert 6rom product sales to SaaS
• Most UresellerU and UpartnersU donTt no+ ho+ to pay their Sales personnel 6or SaaS
' 4ou have to certi6y them' ust lie you +ould invest heavily in your sales trainin/ you have to do thesame +ith them'
•
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Revenue illers
• Per6ection
• $echnical people that
believe 6eatures
matter more that
customers
• % belie6 that your
customers don(t et it
• % 6ounder CE5 that
can(t actually sell
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$han 4ouW
Email- Astel6o.Xmac'com
Sype- Aillstel6o.
KinedIn- ill Stel6o.
$+itter- illStel6o.