This document provides an overview and agenda for a presentation on marketing, sales models, pricing methods, business models, and financial models. The presentation covers various metrics that should be tracked for each area, including monthly marketing spend, cost of customer acquisition, lifetime customer value, churn, pricing variations, and key metrics for different business models like subscription, marketplace, and transaction fees. The goal is to help attendees understand how to model different aspects of their business and make assumptions about important metrics.

1. Marketing & Models
Dave Parker
@DaveParkerSEA
www.dkparker.com
Dave@dkparker.com
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“Separating the forest from
the trees from the bark”

2. Agenda
! About Dave
! Marketing Methods
! Sales Models
! Pricing Methods
! Business Models
! Financial Models
! Q&A
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3. About Dave
! VP Programs at UP Global (Startup Weekend + Startup
America)
! Serial Entrepreneur
! EIR at Mitsui Venture Capital
! Board member for three mid-market, handful of startups
and advisory board for over 50+ startup companies
! Husband, Dad
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4. Two Methods + Three Models
! Marketing Methods – are mechanics to be tested
! Sales Models – how you SELL your product.
! Pricing Methods – how to price your product
! Business Models – are the way to monetize, including key
metrics
! Financial Models – include revenue and expenses. Used
for both forecast and actual
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5. Marketing Methods
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6. How many of
the Top 10 Viral
Videos 2013
were B2B?
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8. 5 reasons you won’t go viral
1. Viral & Network effect is a B2C marketing method
calculated as “K Factor” k = invites sent * conversion
2. No inherent virality in your offering – nothing to share
with other people, e.g. Facebook or WhatsApp
3. No collaboration virality – extending your offering
4. Your target market is too small (TAM/SAM)
5. Budget and Creative - No “me-too” approach will work
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9. What you can do
! Clear product positioning = word of mouth. Can your
message be repeated to their boss?
! Make your product more valuable over time <REALLY?>
! MVP vs. KAP “Kick Ass Product”
! Free trial is different from Freemium
! Corporate users will expense a service below a specific price
point
! What the conversion % to paid is the question you will have
to answer
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10. Marketing Channels and Metrics
What are your core assumptions for marketing?
! Track all Marketing by channel and $$ spend
! Paid, SEO, etc.
! Cost to create leads (traffic)
! Cost (effort) and % convert to prospects
! Cost (effort) and % convert to customers
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12. Key Metrics - Marketing
! Marketing methods
Your marketing metrics here:
! Monthly Spend
! ________________________
! Cost of SEO
! ________________________
! Calculation of spend to
Lead to Prospect
! ________________________
! ________________________
! ________________________
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13. Sales Models
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14. Someone has
to sell your
product – let’s
start with you
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15. B2B Sales Models
! Web Direct – Advertising and conversion based sales, sales
support?, requires customers to search and find
! Direct – internal sales people (Inside or Outside), # of deals/
Month, salary + commissions
! Distribution/Channel Sales – Indirect or external, <# of deals/
Month, no Salary, just commission <Mindshare. Fulfill
demand, don’t create demand
! White Label Sales/Licensing – infrastructure or license sales,
long sales cycle, few but targeted customers
! Retail – Product on shelves - N/A
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16. Known
Market
Web Direct
✔
Direct
✔
Indirect
✔
Licensing
✔
Unknown
Market
Retail
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Low Price
Point
High Price
Point
✔
✔
Known Search
Words
Unknown
Search
words
✔
✔
✔
✔
✔
✔
✔

17. Sales Model Assumptions
The following apply to ALL models
! Cost of Customer Acquisition (CAC)
! Lifetime value of Customer (LTV)
! Typically 36 month calculation
! Time to close sale
! How does this change with product/market maturity?
! Churn/Retention
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18. Key Metrics – Sales
! Sales Method
! Sales Staffing
! Sales Cycle
! Time
! Conversion ratios
Your sales metrics here:your
sales here:
! ________________________
! ________________________
! ________________________
! CAC
! LTV
! ________________________
! Churn
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! ________________________
! ________________________

19. Pricing Methods
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20. You can sell
anything for
nothing
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21. Pricing
! Value based pricing – don’t start too low
! One time or recurring?
! What do you need to charge to cover:
! Cost of build
! Cost of Sale
! Profit Expectation = Cash flow
! A/B test on closed landing pages
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22. Key Metrics – Pricing
! Product variations
Your pricing metrics here:
! One time or recurring
! ________________________
! Monthly/Annual
! ________________________
! Pricing over time
! ________________________
! Services
! ________________________
! ________________________
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23. Business Models
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24. If you have a “K
Factor” >3 you
don’t need a
business model
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25. 6 7 8 Scalable B2B Business Models
Scalable doesn’t include services
1. Subscription – Salesforce – cost of customer acquisition,
lifetime value and churn
2. Market Place – Alibaba – average transaction,
commission on transaction
3. Lead Generation – AllStarDirectories – traffic, form data,
price per lead
4. Productizing a Service – adding scale to a service
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26. 6 7 Scalable B2B Models, Cont.
5. Transaction Fees – Flattr, KickStarter – average transaction
fee, commission
6. Commerce – Physical Goods- Wholesale, cost of goods,
retail, average margin, physical good
7. Combinations – Multisided markets – hardware sensors,
software services with data analytics
8. Non-profit
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27. 1. Subscription
! Example: Salesforce , Box, Moz
! Key Metrics
! Average Revenue Per User (ARPU)
! Conversion ratio – trial to purchase
! Churn
! Challenges: MVP won’t be enough to be KAP
! Notes: “Consumer IT”, Moz uses no sales force.
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28. 2. Marketplace
! Example: Alibaba
! Key Metrics
! Average Transaction Amount
! Number of Monthly Transactions
! Commission %
! Challenges: two sided market places require you start
with one side, value to seller
! Notes: critical mass or marketplace required
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29. 3. Lead Generation
! Example: AllStarDirectories, NetQuote
! Key Metrics
! Cost to generate traffic
! % conversion of form data
! Price per lead
! Challenges:
! Notes:
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30. 4. Transaction/Posting Fees
! Example: 99Designs, KickStarter, Elance
! Key Metrics
! Average transaction revenue
! Fee % per transaction
! Number of transactions
! Challenges:
! Notes:
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31. 5. Commerce
! Example: AmazonSupply, Grainger, Go2Marine.
! Key Metrics:
! Wholesale or cost of goods sold
! Average Margin %
! Average Basket
! Commerce – Physical Goods- Wholesale, cost of goods,
retail, average margin, physical good
! Notes: Owns customer relationship
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32. 6. Combinations
! Combinations business models happen for two reasons
! You don’t know which model is right
! At scale you can expand revenue sources
! Examples: Hardware sensors + software services to create
data analytics
! Challenges – most require traction
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33. 7. Non-Profit
! Example: UP Global
! Non Profit that provides programs for (consumer)
entrepreneurs
! Majority of revenue is from Sponsors
! Challenges: it is scalable, but requires direct sales process
for funding
! Notes:
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34. Other Models – ONLY at Scale
! Big Data Sales – Data Analytics
! Multisided Marketplace – Etsy, Zarly
! Panels – ability to interview panel of customers or pay for
Access. Examples: PatientsLikeMe, Toluna
! B2B2C – please don’t hurt yourself…
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35. Innovative Trends
! Groupon – lead gen with consumer benefit
! Airbnb – enabling payments for Peer-2-peer, sharing
economy
! Kickstarter – crowdfunding
! Xerox – leasing equipment – 1950’s
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36. Financial Models
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37. To the Spreadsheets!
! These details manifest in assumptions
! Time based
! Launch
! Ramp
! Scale
! Market & Brand Development
! Pricing
! Overtime
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38. Just say “no” to $100M!
! Avoid the Top 10 Fails Fundraising
! Bottom Up vs. Top Down Model
! Find a proxy for your business model “Like this for that”
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39. Example
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40. Q&A
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41. dave@dkparker.com
www.dkparker.com/blog
@DaveParkerSEA
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43. Slides to Print
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44. Key Metrics - Marketing
! Marketing methods
! ________________________
! Monthly Spend
! ________________________
! Cost of SEO
! ________________________
! Calculation of spend to
Lead to Prospect
! ________________________
! ________________________
! ________________________
Copyright
DKParker, LLC
2013

45. Key Metrics – Sales
! Sales Method
! ________________________
! Sales Staffing
! ________________________
! Sales Cycle
! Time
! Conversion ratios
! ________________________
! CAC
! LTV
! Churn
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2013
! ________________________
! ________________________
! ________________________
! ________________________

46. Key Metrics – Pricing
! Product variations
! ________________________
! One time or recurring
! ________________________
! Monthly/Annual
! ________________________
! Pricing over time
! ________________________
! Services
! ________________________
! ________________________
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2013

47. Key Metrics - Business Model
! Which Model?
! ________________________
! ________________________
! Challenges
! ________________________
! ________________________
! ________________________
! ________________________
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2013