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When you are talking about large markets 1% is not a short term goal This is where you are precisely wrong. A VC wants to cash out within 3 years. Finally 1%

by ucee054 14y ago

When you are talking about large markets 1% is not a short term goal This is where you are precisely wrong. A VC wants to cash out within 3 years. Finally 1% is never a good metric to aim for. If you wouldn't accept it for retention rate, conversion rate, profit margin etc why is it ok for market share? Because your short term market share goal is in this context a proxy for your ambitions for your burn rate. So it is the exact opposite. You want your conversion rate to go up while you want to keep your burn rate down. 1% is an excellent number in this context. Basing your math for a pitch based on this arbitrary number kind of renders the rest of the pitch worthless. You will find that whatever numbers you target in your pitch are arbitrary, absent a crystal ball that can actually tell you the future. The comical term for this is Scientific Wild-Ass Guess.

stevenameyer 14y ago
This is where you are precisely wrong. A VC wants to cash out within 3 years. I think we may have different definitions of "short term". When I say short term I mean that you are in the process of proving a concept as viable and at the point that pivots are not very costly. If you've reach 1% penetration in a large market then you are past this point. 1% is an excellent number in this context. I would definitely agree that it is a good target to hit. I'm just saying that it should not be your golden standard. There is a difference between saying "this is how we plan on securing a foothold in the market", and saying "If we can get only 1% of the market then we will be successful." The comical term for this is Scientific Wild-Ass Guess I completely agree. Thats why i actually disagree with stating a target marketshare in a pitch. Personally I think that stating total market size, an underserved aspect of that market/competitive advantage and how you plan to try and break into that market should be enough. I don't think making wild guesses at market share is really worth while at all.
- ucee054 14y ago
  I don't think making wild guesses The problem is that the Scenarios section in any business plan is typically full of this kind of bullshit. In business schools they teach the MBAs to layer it on by the ton. The 1% thing I find frankly the least offensive.
  - stevenameyer 14y ago
    If the 1% is the least offensive, I'd hate to see the rest of it. I guess I'm glad that I'm on the technical side of things :P

by ucee054 14y ago

stevenameyer 14y ago

This is where you are precisely wrong. A VC wants to cash out within 3 years. I think we may have different definitions of "short term". When I say short term I mean that you are in the process of proving a concept as viable and at the point that pivots are not very costly. If you've reach 1% penetration in a large market then you are past this point. 1% is an excellent number in this context. I would definitely agree that it is a good target to hit. I'm just saying that it should not be your golden standard. There is a difference between saying "this is how we plan on securing a foothold in the market", and saying "If we can get only 1% of the market then we will be successful." The comical term for this is Scientific Wild-Ass Guess I completely agree. Thats why i actually disagree with stating a target marketshare in a pitch. Personally I think that stating total market size, an underserved aspect of that market/competitive advantage and how you plan to try and break into that market should be enough. I don't think making wild guesses at market share is really worth while at all.

ucee054 14y ago
I don't think making wild guesses The problem is that the Scenarios section in any business plan is typically full of this kind of bullshit. In business schools they teach the MBAs to layer it on by the ton. The 1% thing I find frankly the least offensive.
- stevenameyer 14y ago
  If the 1% is the least offensive, I'd hate to see the rest of it. I guess I'm glad that I'm on the technical side of things :P