Recent developments in web business models have made this hurdle much lower. For example Googles AdSense, Facebooks virtual economy, micro-payments and wide use of the Freemium web model. But it’s still quite a nice feeling to see revenues coming into your enterprise, and makes you want to figure out how to build upon it.
Revenue can change many things for you and your company – valuation, respect, confidence, negotiating position, attraction of other revenue and cash, retention of your equity, and the ability to attract key people and partners. If the revenue is significant, as in a major partnership that pays six figures or more, it can set in motion the next phase of your strategic planning.
Preparation, a Chief Revenue Officer
Also, you must be tactically ready for this step before it happens – know exactly how you want to accept revenue, prepare all required forms, build template legal agreements that may be required, seek help from experts where needed, have your banking in order.
But how to get these first revenues? Aside from the low hurdle examples above, there are many other ways. These days almost everything involves the web and automation, but there is an all important factor – human to human contact. Call it sales or marketing or bus dev, but the important piece is dedicating yourself to spending some time face to face with those you hope will be your highest consistent paying customers. Not “unpaying” users or beta testers, but strategic customers, partners, influencers, those who will take you to your first levels of success beyond investors. This is how you “get it going”, how you start the revenue ramp upwards.
For many startups this face-to-face part of revenue development is where they spend the least amount of their time, for hundreds of reasons, but mostly because they aren’t comfortable with this part of the process. If you can overcome that issue, you’ve overcome a major hurdle to growing revenues. The impact of hearing live from another human about your product is immeasurable, proven over generations of business.
One way to vastly increase your company face-to-face hours per week is to early on have a dedicated partner/co-founder who does only this – “Chief Revenue Officer” – talks to people, gets out there, constantly hunts for new money for the company and articulates the vision. In the beginning the rainmaker is usually the founder/de-facto CEO, but not always. Some startups bring in someone pre-revenue to take responsibility solely for getting the first revenues. I’ve actually been that person at a few startups; it’s a great job for the right person, whether you call it sales, business development or even CEO. The key is getting the right person/people, indoctrinate and empower. And get that first revenue.