Jill Stelfox Slides

8/20/2019 Jill Stelfox Slides

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Founders Institute

Revenue

Jill Stelfox



Good Versus Cash

Your product cancompletely SUCK and you

can make money!



It is a race



Revenue

• Lifeblood of your company

This is your FUEL

• Sales deliver revenue

It will be chaotic



Product & Service



Easily Comparable Products &Services areEasily Price Comparable



Monetize Quicly



Viable!



Sales- CostsPositive Number = YesNegative Number = No



Ho !ar are you !rom Cash"

Product

"Service

Money



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



%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



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



$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



?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



?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



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



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



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




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




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



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'

•



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



$han 4ouW

Email- Astel6o.Xmac'com

Sype- Aillstel6o.

KinedIn- ill Stel6o.

$+itter- illStel6o.

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