# Why Businesses fail - John Coogan Created: 2022_03_27 13:16 Tags: [[Startup]] [[Business]] [[Psychology]] 6 Phases that a company must go through to hit big 1. Product 1. Vapor ware is when a business is built without actually having the product 2. If you are a tech startup you need someone who knows tech on the team 1. Investors know that technical teams are more likely to win 2. Developers don't like working for non-tech people 3. Founders need to be deep experts in the field of the product 4. World needs your product, possible to build your product, and you have the team to actually build it 2. Demand: Do people want to buy your product? 1. Build product fast don't build it and hope they will come 2. Ask people to pay for your product, test marketing on HN, Product Hunt 3. Profitability 1. Gross profit: Revenue - costs 1. Describes how much money the business makes just delivering the product 4. Marketing 1. Lifetime value 1. Total amount of gross profit generated by a customer 2. Customer Aquisition Cost 1. How much it costs to get a customer 3. Customer Aquisition Cost < Lifetime Value @ scale 1. Blue Apron wasn't able to figure out how to get people to try the product and keep using it 2. VPNs have so many ads on the internet because their lifetime value is high because it does not cost much to keep a VPN running 5. Scale 1. How big is your market? 2. Players begin to saturate their own market while they figure out how to scale 3. Peloton, everyone that wanted a peloton bought one and their growth slowed, instead they should have tried to scale laterally by buying adjacent businesses related to fitness 6. Platform 1. "You are only really a platform if the value of the platform is worth more than the company that owns the underlying platform" ## References - [Youtube Video](https://www.youtube.com/watch?v=toUEcVKqkLU)