I recently wrote a post about the negative impact of the Casper IPO on investor sentiment in the Direct-To-Consumer (“DTC”) space. Anytime a company in a sector goes public at a valuation that is less than half the valuation of its last round, it’s going to ripple through the rest of the ecosystem. But there is another lesson that’s worth discussing. When I teach the concepts behind Pivot to Profitability, one point I always make is that raising money is a sales process. The better your …
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Learning From the Casper IPO – Investor Sentiment Shifts Fast
In the world of startups and venture capital, industries move in and out of favor very fast. It doesn’t take much for an industry that’s been attracting huge amounts of investor attention and capital to suddenly lose its shine. We are seeing this happen right now in the direct-to-consumer (DTC) space. Casper recently filed for its IPO. If you don’t know Casper, the company is one of the leaders in the very crowded DTC mattress space. Casper has raised over $355 million in venture …
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What Is Your Business Model?
If there is one thing that I think we can all agree on, it’s that Google Maps is still much better than Apple Maps. This is particularly true when I’m going somewhere off the beaten path…a new camping spot or perhaps a restaurant in a remote location. But if Google Maps thinks I’m walking rather than driving, the directions aren’t going to make any sense. And I’m probably going to end driving down sidewalks and bike paths if I’m not careful. But what KPIs should we choose? We’ll get to …
Know Your Burn Rate – Set Up Your Assessment Framework
Stephen Blank describes a startup as an organization formed to search for a repeatable, scalable, profitable business model. They are not small versions of large corporations. A well-run startup is like a laboratory, testing hypothesis, comparing actual results against expected results, and constantly executing small pivots until a company is born. Or unit the cash runs out and your experiment is deemed a failure. To properly run your startup laboratory, you need to get an assessment …
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Don’t Race Ahead To Find The Treasure. Take The Time To Decode The Map.
The classic treasure hunt story always centers around the map. First, our heroine has to find the map. Then she has to decode the map. And then finally, she needs to follow the map, navigating dangerous obstacles along the way to riches beyond her wildest dreams. Building a startup is a lot like this. Once you launch your company, you’re going to start getting data. You’ll learn how you’re attracting customers, how they engage with you when they arrive, where the value is being created. …
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As Long As You Have Cash In The Bank, You’re Still In The Game
With venture rounds bigger than ever, it can be difficult for a founder to make the decision to pull back on growth initiatives and focus on finding the path to profitable growth. Seed rounds used to be $250k. Now they are $1.5 - $2.0 million. $5 million Series A rounds have ballooned to $15 - $20 million. The $50 million Series B can be the biggest trap of them all if the company scales into unprofitable marketing channels. In each case, venture capital is raised with the expectation …
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