3 ms·

The biggest problem with this chart is that for most startups keeping a 2.5% weekly growth for years is impossible. Only a tiny percentage with viral products c

by aytekin 12y ago

The biggest problem with this chart is that for most startups keeping a 2.5% weekly growth for years is impossible. Only a tiny percentage with viral products can accomplish it. For the rest of us, the growth percentage gets smaller as the number of users increase and churn starts kicking in.

reeses 12y ago
That's not a problem with the chart. That's a problem with starting a business. You don't have to grow along a fixed axis, whether that be # of users, # of widgets, etc. You just have to average the growth in income. I had a similar initial reaction to the chart because I stick to R&D-driven startups that will run at $0/week for as long as it takes. However, pushing the stop-energy out of my head and running with it is a good gut check for viability on breaking even given assumptions about expenses vs income over time. The output isn't "we will grow at an annualized 360% forever, yielding foo," it's "we only need to kick in $x to have a good shot at getting to B/E."
- nostrademons 12y ago
  Yeah, I think many startups have a fairly long customer/product development period where their revenue will be $0, and then quickly pour on the gas once they have users and want to monetize. I wish the tool had an additional degree of freedom, which is "time until first revenue". That would let you model how much time-to-market is costing you until breakeven, and trade off a business idea that generates revenue immediately vs. another business idea that takes a long time to incubate but may have a higher growth rate. I guess you can figure it out with some quick mental math (just multiply monthly expenses by time-to-market and add that on to capital required, and add the time-to-market on to the breakeven time), but if it were in the tool it'd be easier to visually see the effects of different choices there.
usaar333 12y ago
2.5% isn't a terribly high growth rate. There's plenty of B2B companies whose revenue grow at this rate until they are bringing in tens of millions of revenue.
- aytekin 12y ago
  You guys are right. I was stuck on thinking how to keep a consistent 2.5%/week. But at the end, when you average numbers out, you might find the 2.5%/week number. So, it is not impossible, but it is certainly hard. :)

by aytekin 12y ago

reeses 12y ago

That's not a problem with the chart. That's a problem with starting a business. You don't have to grow along a fixed axis, whether that be # of users, # of widgets, etc. You just have to average the growth in income. I had a similar initial reaction to the chart because I stick to R&D-driven startups that will run at $0/week for as long as it takes. However, pushing the stop-energy out of my head and running with it is a good gut check for viability on breaking even given assumptions about expenses vs income over time. The output isn't "we will grow at an annualized 360% forever, yielding foo," it's "we only need to kick in $x to have a good shot at getting to B/E."

nostrademons 12y ago
Yeah, I think many startups have a fairly long customer/product development period where their revenue will be $0, and then quickly pour on the gas once they have users and want to monetize. I wish the tool had an additional degree of freedom, which is "time until first revenue". That would let you model how much time-to-market is costing you until breakeven, and trade off a business idea that generates revenue immediately vs. another business idea that takes a long time to incubate but may have a higher growth rate. I guess you can figure it out with some quick mental math (just multiply monthly expenses by time-to-market and add that on to capital required, and add the time-to-market on to the breakeven time), but if it were in the tool it'd be easier to visually see the effects of different choices there.

usaar333 12y ago

2.5% isn't a terribly high growth rate. There's plenty of B2B companies whose revenue grow at this rate until they are bringing in tens of millions of revenue.

aytekin 12y ago
You guys are right. I was stuck on thinking how to keep a consistent 2.5%/week. But at the end, when you average numbers out, you might find the 2.5%/week number. So, it is not impossible, but it is certainly hard. :)