In the startup world, the financial forecast is definitely uncertain. As a consequence, some people see the forecast as a reflexion of the entrepreneurial dreams only.

But I remember a question I asked to an experienced consultant:

“What is the best advice in the B2B world?”

He answered “ benchmarking”. And the more I look at the entrepreneurial world, the more I think he is right. Benchmarking means to internalize external world realities and reduce execution risk. Similarly, your budget is an ambitious but realistic benchmark. Forecasts are not made to be 100% correct. Forecasts are showing a direction. They…

The recent difficulties of growth players like Wework or Uber generated a lot of interrogations about startup strategy: should you target Growth or Margin?

In fact, Growth and Margin are 2 faces of the same coin.

And this coin is Value creation! This article will explain you why…

Historically, the first people concerned by this choice between growth and margin are stock investors.

Value investors, like Warren Buffet, were focused on stable and undervalued stocks. While growth investors looked at bets creating value through growth, as Amazon, Facebook or Google.

PART1: Growth vs Value investing, the birth of a dichotomy

The distinction between the two investor classes of investors is…

By Muffin from Pexels
By Muffin from Pexels

The answer to this question should be binary: yes or no? A positive answer would be translated mathematically by freemium feature costs lower than direct acquisition costs.

STEP 1: Calculate the present value of your freemium feature costs

Your freemium feature will generally imply several categories of costs.

  • Initial development costs: as a lump sum, no discounting is necessary. You should just be cautious when you estimate these costs.
  • Annual maintenance costs: you consider that the freemium business model is scalable with no marginal costs. The annual maintenance cost is generally based on proportion of your FTE that you affect to the freemium feature. For example, a $400K annual maintenance cost…
Image by Alun Davies

You are already growing your number of customers as fast as you can. So, how could you create more value for your company?

The answer: sell more to your existing customers!

Recurring purchase businesses are prone to growing ARPU (Average Revenue Per User) or transactions. Why? Because we want to test your product or service. We start by buying a book on Amazon, then we buy shoes or furnitures!

This article will explain how to value your customers with an upsell strategy in 3 steps.

STEP 1: Calculate your initial ARPU growth

This is quite straightforward. If your average customer were spending $100 last year versus $120…

The Startup environment possess its own challenges. Especially if you want to raise Venture Capital funds.

However a Startup CFO could be a key competitive advantage. To do so, you should focus on these 3 specific skills:

1. Communication Skills

Think about the Startup stakeholders: why Sales or UX are considered essential to enhance your relationship with your Customers?

Because Sales and UX are in the contact zone with your Customers.

The CFO is in the contact zone with your Venture Capitalist and your Potential Acquirers:

  • You need a CFO understanding the Financial goals of your Venture Capitalist: what kind of multiple investors…

Some Fintech startups are betting on the growing Assets Under Management (AUM) of millennials.

Among them, you will find robo-advisors, micro-saving applications and trading platforms for self-directed investors.

This idea is obviously seductive. However, we could ask ourselves what is the real value of a millennial with an upside potential? As the Customer Acquisition Cost (CAC) of robo-advisors is generally considered to be between $200 and $400, we expect a CLV above this threshold.

Otherwise, the company is probably destroying value, as the money model is not “scalable”: every additional customer costs more money than the future margins on the…

1. A leadership, as a strategy, needs to be differentiated.

After 17 years in financial services, a strange feeling is flowing through me: the majority of financial leaders are applying the same old-fashioned and conservative leadership. As if the finance sector was waterproof to new leadership styles used by successful companies like 3M, Twitter, Facebook, Apple or Google.

The increasing regulatory pressure often have been THE excuse justifying the lag of the financial industry. Compliance is obviously necessary and time-consuming. Nevertheless, if all the leaders are doing the same thing, how do you get an edge on your competitors ?

2. However, most of the time, financial leaders focus on economies of scale.

In the fundamental equation of a financial business, leaders have…

A short list of the most appreciated Fintech books, using ratings on Goodreads.

The selection covers the main topics as bitcoin, cryptocurrencies, blockchain, wealthtech and insurtech.

1.The Ascent of Money

Damien CABADI 🌍 🕊️

#Fintech #MBA #CFO #finance #banking #payment #venturecapital @lban_lux @INSEAD @HECParis @MITFintech Subscribe to my blog !

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