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When coming up with a financial plan, at some point you’ll likely get to a confluence where you have a sense for where you want to get your startup’s revenue to and how much demand you’ll be able to generate, but you don’t know if this demand will be enough to meet your lofty revenue ambitions. At this point, planning can feel a little bit like the infamous “underpants gnomes” South Park episode . So how do you tie these two together and can you get a sense for how these different parts fit together?  One framework you can use is to think through the efficiency with which you convert demand into revenue. How efficiently you convert demand into revenue can be expressed as a product of two factors: Your close rate (what percentage of expressed interest do we convert to paying customers), and; Your average transaction size (or deal value, order value, etc.) This article will introduce a framework that will allow you to assess the feasibility of your revenue plan given your demand foreca

Once you’ve hit the $1M ARR mark and built out your go-to-market teams your organisation will most likely be deriving revenue from a mix of sources. These vary a lot, but might include a Sales Development Rep (SDR) team, salespeople sourcing deals themselves, partnerships, events, paid ads or content marketing. Being overly-focused on one source usually means that you're leaving opportunity on the table, and so it makes sense to see a bunch of sources at companies that have achieved some scale. Diversifying your demand generation is great for broadening the top of your funnel, but it does add additional complexity to your go-to-market engine and make things more difficult to manage. One of the tricky problems this introduces is revenue attribution. Once you have more than one source of revenue, you'll need to start deciding how to give sources "credit" for revenue. There are a few different methodologies you can use here, and each will have a different impact on the m

When entering new markets one of the big, difficult-to-reverse decisions you need to make is what price to set. This is a tricky question that involves both human, analytical, and operational components to your decision-making and is important to consider carefully. Pricing is one of the most important activities your startup will undertake. Infact a 1% increase in price leads to an 11% increase in profitability on average! Unfortunately pricing in early stage tech startups has usually been more art than science, and founders often feel lost trying to make decisions. So where to start? Setting a publicly-announced price is a high-commitment decision that is difficult to back out of, especially if you've already established a home base. Starting with baby steps in the form of temporary targeted promotions, test prices with pilot customers, or other limited forms of experiments will allow you to get a sense for what works while not committing yourself to a price that might not be ri

For a startup CEO that’s hacked through the bushes of idea validation, MVP-building and product-market-fit, one of the next big challenges is naturally how to measure success in customer acquisition. At a first glance, this is pretty straightforward. Count the number of customers or revenue every week, put them in a deck to show your board, crack open a beer and you're done! However, the traction chart doesn’t go upwards to the right on its own.  Therefore, the key to building a reliable customer acquisition machine is understanding all of the steps that come before the deal is closed - from the first time that the customer interacts with you all the way through to the point at which they become a customer -- the journey. This is what allows a growing company to identify where user acquisition bottlenecks exist, refine their go-to-market model, and understand what factors lead to strong performance. At this stage, you should be quite familiar with the concept of a customer acquisit

As CEO of a fast-growing startup entering into a new market, at some point you will need to reevaluate your go-to-market. In some ways entering a new market is a negotiation. There are terms that the market will set for you, and there are also terms that you should be setting yourself as the CEO.  New markets will demand things from your company that will be unfamiliar. Maybe you need to take payment using local methods or currency. Maybe the local market calls for additional services beyond your current offerings. Or maybe it's simply that you don't speak the local language - entering Vietnam is pretty tough if you don't have Vietnamese-speaking sales, marketing, or customer success muscle. In any market entry, figuring out what new capabilities are required of you by the market is a key factor in your decision-making. At the same time, there are also terms that you should be setting. This article will mostly deal with how you should decide these terms, and what the implic