This is an extension of a talk I gave earlier this year at MamaBear Conference put on by 500 Startups. I’ve been mean to expand on this for a while. This is the exhaustive version of that talk as I continue to get a few emails every week from ambitious (and a little crazy) entrepreneurs who are trying to launch their first subscription based business.
Before we get started though let’s talk about a few reasons why you shouldn’t.
Simply put, there was and continues to be too many subcom businesses. Thanks to the straight forward model and day 1 revenue a lot of people rushed into the space. Unfortunately that means that VCs were also inundated with pitches for this model. So they have a noticeable amount of fatigue around the model. Many of them affectionately call these businesses “shit in a box” so that should give you some idea of their level of interest today. So if you can’t build your business without, or are dependent on large funding events to grow ($20M plus), forget about it. You won’t get the money.
If you’re still crazy enough to try here are the basic milestones most investors expect for this type of business.
- You have 1000 active subscribers within the first 30 days and 10,000 subscribers within 12 months.
- You have the ability to buy customers at low to no cost.
- You have (or cas.com/blog/wp-content/uploads/dockers-free-pants.jpg” alt=”” width=”460″ height=”307″ />
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