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to succeed, businesses need to plan for short-term earnings and long-term profitability. Early-stage founders may be tempted to come up with six ways the company can make money. Don’t fall into temptation: 5 unproven solutions don’t make him one real solution.
That being said, there may be some business models that could be profitable. Every aspect of the business he condensed into one slide The Business Model Canvas approach gives you a holistic view of every aspect of your business. However, for the pitch deck, I think he’s worth narrowing down to two: customer acquisition and customer lifetime value.
For acquisition, focus on where you found your customers, whether those acquisition channels are scalable, and how much it costs to acquire a new customer (usually called the customer acquisition cost (CAC)).
In terms of lifetime value, we look at the value each customer has from the moment they show up on your product until they stop using it. Every dollar they spend along the way is the lifetime value of each individual customer. One customer category is people who come to the platform and quickly leave. Another category is customers who stay for weeks, months, or years.
For simplicity, dividing total revenue from customers by the number of customers is usually sufficient. This is the average value of our customers so far. The challenge is to model how long they stay.By definition, your truth Lifetime value after they leave; here you need to build a model and make some assumptions about how much time your customer will spend with you and how much money they will spend along the way.
A startup’s only mission is to find a repeatable business model
I totally agree with Steve Blank’s definition of a startup. In other words, your company is meant to be a machine that can turn his $100 you put into the top into his $150 from the bottom. Throw $150 back at the top of the machine and you have a fast-growing, viable, and repeatable business model.
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