By Larry Chiang
What they don’t stress in engineering school is spending and making money in 10k chunks.
It’s painful to see us millennials botch it so here are some tips to future founders and co-founders talking cash-money.
Tip One: Burrow into cash savings specifics.
My family has some Cantonese. We make fun. They always ask HOW MUCH DOES THAT COST. It borders on rude but being “rude” is business intimate. It’s important to almost interrogate when it comes to costs.
This point leads me to the money issue of…
TIP NUMBER TWO: clarify cash saved when you’re doing EUBM.
A key component of Engineer
Up
Business
Model
is to clarify cash currently getting spent. Then. Then offer a lower cost alternative that you engineer as a service.
For example, you go to a tech conference or VC conference. You hear of an exec that is spending $3mm on marketing and lead generation. Offer a zero risk alternative (one-way letter of intent/ internal escrow) for ~10%. So 300k. There is more on EUBM via #EUBM that I spent weeks and weeks curating on twitter.
Clarify to the point of interrogating.
Interrogation number 1: it’s layers of questions.
For example. In continuing with the previous example, you ask, “So approximately how much does your VC firm spend on leads?”.
THEY SAY: “We don’t talk about that publicly”
YOU SAY: “Ballpark?? The reason I ask is because there might be a way to double the number of leads. With half the money.
Tell me how are you dashboard metricly driving Eventbrite/twitter/ wordpress leads into sourced deals— how much did you spend on SXSW alone.
PAUSE
AND
WAIT FOR ANSWER
Just like an interrogation… There is a point where the person just starts to confess.
Have them confess money issues to you.
Quick Q: IF I SEE you make money decently well, VCs will want to invest with you. There will be a bunch of VCs here:
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Larry Chiang (@LarryChiang) |
There is an $80, VCs party Aug 1 at August Capital
There are some good articles Dan Shipper wrote on this topic of cash-money revenue. Google him
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