BAP #8 - Focusing on an imaginary 3 year revenue goal 2
Focusing on a large long term abstract revenue goal makes you loose focus and morale. Instead focus on building the first $50K of revenue. Just saw this by Wil Schroter, The First 50 Plan via Ken.
The problem with trying to think in terms of “how do we get to $10 billion in revenue in 2050” is that you lose sight of the fact that your resources are very limited today. Staying focused on earning the first $50K of revenue allows you to concentrate your resources on a very well-defined short-term goal.
This is a brilliant little trick Wil came up with. Following the same logic I was also thinking that a better or maybe earlier goal of $2k pm in regular revenues might be better for a small bootstrapped web startup. For a frugal bootstrapper this may be sufficient to break even. Once you have proven to your self and others that you can make regular monthly cashflow and not just a burst of big sales. This could be an easy metric to yourself. Lets say your $2k revenue comes from 100 sales at $20. That is something you can understand and focus on. Our goal is to reach 100 monthly sales.
Updated, Thanks to Peter for noticing a slight math error.
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I love your point. That’s exactly what any bootstrapping company that is developing a new product – should do. Focus on the next few sales. Trying to predict sales 3 years down the road before you’ve specified your product, defined your target customers and markets, proven its ROI to customers and determined their price point, is pretty silly. (I’ve done it, though.)
BTW . you should check your math. 1,000×20 = 20,000. Not 2,000.
I think a big mistake that many startups make is trying to seek the instant financial gains or perks too soon. There is an art to hitting that point when you break even with a component of your business. I think that a lot of people also don’t gadge how much time went into something so breaking even in two to three months for that month alone is still not taking into consideration all the time and energy that went into getting to that point.