
Startup Growth Calculator - staunch
http://growth.tlb.org/
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absherwin
YC has now funded enough companies that if it has the data (likely in a bunch
of spreadsheets) to do a more accurate version of this. Expenses aren't really
flat, growth isn't purely exponential and today's estimates aren't reality. A
simple model that fixes those three things, should improve accuracy though it
would still be subject to enormous volatility which could also estimated based
on the same history. This also ignores optionality and probability of a failed
raise which would further shift the answer.

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cperciva
You're assuming that YC has this information from all the startups they fund.
I doubt this for two reasons: YC is probably too busy to spend time collecting
spreadsheets from everybody; and from what I've seen, most startups aren't
careful enough about their accounting to have the data in the first place.

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absherwin
I doubt there's a formal collection but I'd be equally surprised if they don't
have early stage projections from many of the companies. As silly as they can
be, they're often part of pitches.

From my limited personal experience, every startup I've chatted about this
with has some sort of forecast though the degree of seriousness with which is
was constructed and is used varies.

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bellerocky
I'm now working at my 3rd YC startup. Sometimes we show our Leftronic graphs
to investors, but other than I have never seen someone send hard data to YC.
YC is very hands off. You do a weekly dinner the first few weeks, then you do
a demo day, and then after that maybe sometimes you get an email once every
few months asking how you're doing. Maybe you go visit when you have a
question or are bored. That's about it. Other than that you just write code
and talk to users.

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teekert
It doesn't work for me (Firefox/Win7), I can't grab the dots/lines.

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tlb
Thanks, I'll look into it.

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read
One more suggestion: consider moving the text indicating the capital needed
outside the blue area. Or at least provide another copy of that text outside
the blue area.

It becomes hard to see that text with low weekly expenses($2500), close weekly
revenue ($1000), and good growth rate (5%)

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aytekin
The biggest problem with this chart is that for most startups keeping a 2.5%
weekly growth for years is impossible. Only a tiny percentage with viral
products can accomplish it. For the rest of us, the growth percentage gets
smaller as the number of users increase and churn starts kicking in.

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reeses
That's not a problem with the chart. That's a problem with starting a
business.

You don't have to _grow_ along a fixed axis, whether that be # of users, # of
widgets, etc. You just have to average the growth in income.

I had a similar initial reaction to the chart because I stick to R&D-driven
startups that will run at $0/week for as long as it takes. However, pushing
the stop-energy out of my head and running with it is a good gut check for
viability on _breaking even_ given assumptions about expenses vs income over
time.

The output isn't "we will grow at an annualized 360% forever, yielding foo,"
it's "we only need to kick in $x to have a good shot at getting to B/E."

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nostrademons
Yeah, I think many startups have a fairly long customer/product development
period where their revenue will be $0, and then quickly pour on the gas once
they have users and want to monetize.

I wish the tool had an additional degree of freedom, which is "time until
first revenue". That would let you model how much time-to-market is costing
you until breakeven, and trade off a business idea that generates revenue
immediately vs. another business idea that takes a long time to incubate but
may have a higher growth rate. I guess you can figure it out with some quick
mental math (just multiply monthly expenses by time-to-market and add that on
to capital required, and add the time-to-market on to the breakeven time), but
if it were in the tool it'd be easier to visually see the effects of different
choices there.

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rdl
It might be worth doing run rate and retention model vs. just net annual
revenue. Showing how retention really matters would be worth the added
complexity for SAAS companies, IMO.

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BrentOzar
Before you dismiss it for being too simple, think about the wider audience of
startup founders, not just YC readers. They often can't predict churn rates or
viral growth timelines or per-user infrastructure costs. This is a great
starter model to say, "At the very minimum, you should plan on having $X."

After the first year of doing business (or faster?), you should revisit your
model with these kinds of metrics and hone the model, but you usually won't
have it going into year 1.

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reeses
Fully agree. There are so many people who can't do the basic Excel work even
to generate the information on the chart who are capable of starting a
business. (I include in this every restaurant ever opened, modulo statistical
outliers.)

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numlocked
This is a really nice visualization and a fun way to play with the model.
Though for any start-up that sells physical goods...gross revenue is not very
useful when it comes to projecting profitability. But it's fun anyway and
maybe more accurate for pure software businesses. Kudos to the author, and
great that it's on github as well!

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iandanforth
'the author' is a founding yc partner btw.

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numlocked
Hah! And kudos to him. For this, and for the Eunicycle...the scariest thing I
have ever had the privilege of riding :)

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netcan
Eunicycle certainly sounds scary

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yepyepyep
Awesome tool! This assumes a somewhat constant expense so it doesn't apply as
much to SaaS companies with inside sales model etc.

Hope someone makes a version that applies to SaaS companies where expenses
usually increase almost linearly with growth at least initially(until the
recurring revenue begins to come in).

At my start-up, a typical new sales rep makes back his monthly salary from
month two on-wards costing us marginal amount initially. In year two is when
we make the real money(off renewals; with no commission to pay). If you are
wondering why we can't scale infinitely, scaling ad reps is a different beast
the adwords - though at time, it certainly feels like a machine similar to
adwords :)

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alain94040
It's extremely unlikely that your costs would remain constant if you are
growing at an exponential rate. So I'm not sure what the point of this
calculator is.

But I love the graphical interactivity, very nice.

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conanbatt
This calculations are more about a financial projection than a model for
growth, simply because you are picking growth as one of the variables.

Its practical for a very rough +- order of magnitude calculation if you are
pretty sure about your growth and market size. Then again, as a startup in
your first years, you have little idea about the last two.

A growth model has to balance how you go up and how you go down (both in
business/user loss) and no business i can think of handles revenue
exponentially and costs fix.

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caublestone
For physical products, input gross profit in place of revenue.

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julionc
Reference from Source code [Don’t be the startup that accidentally runs out of
money]([https://news.ycombinator.com/item?id=7239975](https://news.ycombinator.com/item?id=7239975))

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zefi
This is so well designed, great stuff Trevor!

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devsatish
played with this for a bit and it filled my browser history (chrome) with a
zillion urls of it.

