Revenue, Cost & Prots December 8, 2011 Dave Parker @DaveParkerSEA

Agenda Revenue Cost & Prot

Models

Your Model

About Me Husband & Dad Serial Entrepreneur $38M License Online $127M Exit on Classmates.com 3 other exits Board of 4 Companies

SeaQle FI Director New Company bundled.com, Inc.

Survey How many: Technical? Business MBA Types? MarkeZng/Product?

Revenue Types Whats your hypothesis? SubscripZons App Purchase Lead Gen Product Sales Selling the Data Services

B2B Sales Funnel "

B2C (Web) Sales Funnel "

Costs Variable Costs Change with Dierent producZon/AcZvity Level AdverZsing, MarkeZng, PR, HosZng,

Fixed Costs No change or Vary slowly Salaries, oce space,

Cost of Sales What it cost to sell the product

Costs "Perceived Costs REAL Costs

What does a $50K employee cost? "Perceived Costs

What does a $50K employee cost? "Perceived Costs REAL Costs

Revenue Costs = Prots " Identify key drivers to the business forecast! Avoid false precision"

Map a simple and achievable path to milestones! Beta release" 1st customers" Breakeven gross margin" Targeted gross margin" Targeted bottom line"

Keep the forecast fresh! At least annually" More often as signicant assumptions are claried"

Cash = Survival

AssumpZons/Key Drivers What are the top level assumpZons Trac/Monthly Uniques Conversion Price Time to close RetenZon Cost of Customer acquisiZon/Cost of Sales

BoQom Up vs. Top Down Proxy for your business

13 Consumer Models TechCrunch Teardown: 13 Consumer Internet Business Models (Part I) The World According To Carp hQp://fndri.com/jEvuYa - Steven Carpenter Media Paid Service Physical Commerce

Benchmarks

10 Models from 2010 10 Business Models That Rocked 2010 Nick De Mey hQp://fndri.com/lUZ2fI 10 PaZents like Me 8 Groupon 6- PaywithaTweet 4 Free with in App Sales 2- Airbnb.com 9 FlaQr.com 7 SpoZfy 5 HumbleBundle 3 Quirky 1 Kickstarter.com

Business & Revenue Model Examples | Board of InnovaZon hQp://fndri.com/iJGFNJ

Your examples What model will you use? How will you model it? Example:

My Example

Cash > Revenue > Prot

Cash (year 1)

Revenue (years 2-4)

Prot (IPO)

Product-Market Fit

Business Model Growth

Make Money

Dave Parker Dave.Parker@.com 206.818.7000 @daveparkerSEA www.ForestTreesBark.com