Six Years Now Makes A Generation

This video is essential when considering marketing and strategy for next few decades. Very much worth a look.

Honest Revenue Projections

In entrepreneurial ventures, it's almost always the entrepreneur/founder who creates revenue and expense projections for the pro forma. Talk about a conflict of interests. It's especially dangerous when you as founder develop the expenses first. It's only natural to look for revenues that rise to these expenses after that. Classic inductive versus deductive reasoning.

The short post: develop revenue projections first. make them solid numbers that draw on similar operations. Go full Sherlock Holmes on finding comparables, using their publicly posted revenues  and estimating revenues for private corporations. Contrary to general belief, most private companies do publish their revenues in interviews and public promotional material. You just have spend time finding this scattered and incomplete data. Gathering what you can and interpolating the rest is difficult but possible and will generate a basis for reliable revenue estimates. Use multiple sources.

When you're confident you have a reasonably good estimate for revenue over the next three years, only then should you tackle expenses. If these estimates are less than revenues, lucky you. If not, you have to take a harder look at expense and consider bootstrapping measures to bring them into alignment with revenue projections.

Finally, before revising revenue and making UNreasonable adjustments, have a trusted colleague take a look. And then have them consider any adjustments you make. If unreasonable, the project may be a no-go.

Walking Away From A Seemingly Great Product

Had a client demo a great product for me recently. I was really impressed with his passion and the utility of the device. But the product lacked a key feature that will prevent it from being a success and I passed.

Consider the issues:

The founder claimed to possess a great deal of experience in business as co-owner of two technology related firms. He also claimed participation in a business with a similar product to the one he was now promoting. Unfortunately, he couldn't provide proof or either.

In addition, he was asking for really large and rounded figures to start the business but failed to deliver a detailed list of anticipated expenditures. Not a single pro forma or estimate on company letterhead could be produced.

Revenue, likewise, was estimated using generally available figures for sales of other products in the same industry. But no basis for his product's anticipated stellar performance was available.

Worse of all, he was adamant that none of this was necessary. His pitch was that this was obviously a great product in a great industry and anyone with half a brain and the balls to go after it would. The "academic stuff" was a waste of time in his mind. He even suggested anyone not sold on this was a wimp and just p;lain stupid.

Lesson here is that a very critical component of the product is the entrepreneur. Had he asked for help assembling the requested data and provided what he had. I might have helped. Had he an entrepreneurial "stop at nothing" personality, he'd find comparables for revenue projections. I tried coaching and encouragement, but you can only lead a horse to water.

I have no doubt a similar product owned by a more rational entrepreneurial spirit will prevail.

I passed.