Monetizing Your Business - Presented to the Sales Club at the Harvard Business School 2014
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Monetizing Your Business: Why Businesses Need To Focus On Sales Growth
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I conducted this workshop about the importance of identifying the right revenue model when starting a company for the business students and members of the Sales Club at the Harvard Business School.
Transcript of Monetizing Your Business - Presented to the Sales Club at the Harvard Business School 2014
Monetizing Your Business:Why Businesses Need To Focus On Sales Growth
Monetizing Your
Business:Why Businesses Need To Focus On
Sales Growth
By: Steven Tulman
For: Harvard Business School
Email: [email protected]
Twitter: @StevenTulman
LinkedIn: ca.linkedin.com/in/stevetulman
Why Do So Many Startups Fail?
CB Insights analyzed 101 failed companies and the top reasons they failed.
Here’s a recent article I published on LinkedIn addressing the top 3 reasons.
5 Core Needs of a Business
① The idea
② Product/market fit
③ People who can execute
④ Funds to make it happen
⑤ Revenue to keep it growing
Why is Making Money Really
Important?
Keeps your business alive
Makes is easier to get investments at higher valuations
Enables you to grow your business and do more
Helps you to qualify for business loans
Builds confidence amongst employees and stakeholders
A Few Success Stories
- IPO’d in May 2012- Pre-IPO revenue
$3.7B in revenue and $1B in profits
- IPO’d in November 2013
- Pre-IPO revenue over $500M
- Bought by Facebook in February 2014 for $19B
- $20M in revenue in 2013
A Few Not So Successful
Companies
- Founded in 1999- Millions of users- Failed to monetize- Several law suits- Ceased operation in
2001- Founded in 2011- Graduated YC- Raised $1M @ $7M Val- Couldn’t monetize- Ran out of money- Shutdown 2013
- Founded in 2008- $7.3M in Funding- Over 5M registered users- Sold US ads to
international users- Failed to monetize- Went under June 2014
Monetization Do’s and Don’ts
You DON’T need to monetize right away
You DO need to have a clear sales strategy
You DO need to project when revenue will come in
You DO need to project how much will be generated
You DO need to monetize eventually!
Some Popular Options
Affiliate Revenue Model
Ad Revenue Model
Recurring Revenue Model
Transactional Revenue Model
Project Revenue Model
Services Revenue Model
Developing Your Sales Strategy
Build it yourself or hire help
Hire the right people for the current stage of your business
Hire the right people for your product and market
Hire the right people for your chosen revenue model
Core Components of a Sales
Strategy① Understand your audience (Become an industry expert)
② Determine your sales acquisition and prospecting approach
③ Develop your sales process (Your step-by-step process)
④ Create a detailed customer onboarding plan
⑤ Develop a customer management process
⑥ Determine KPI’s and Monitor Them Regularly
⑦ Analyze, Revise, and Repeat
What You Need From Your Sales
Team
① Your sales team should know your customers
② Your sales team should be empowered and held accountable
③ Your salespeople are your brand ambassadors
④ Your sales team must grow your revenue
What Does it All Mean?
Sales are important – User acquisition model is weak on its own.
Freemium, Premium… it’s all about the Benjamins!
i. Determine your revenue modelii. Develop your sales & marketing strategyiii. Hire the right people to executeiv. Analyze, revise, repeat
Collect data, but understand why, who will use it, how they’ll use it, and why they’ll pay for it.
Investors, shareholders, employees – everyone cares about revenue
It REALLY IS all about the Benjamins!
By Steven Tulman
Email: [email protected]
Twitter: @StevenTulman
LinkedIn: ca.linkedin.com/in/stevetulman
