Google Answers Logo
View Question
 
Q: Strategic startup decision: single or multiple revenue sources? ( No Answer,   4 Comments )
Question  
Subject: Strategic startup decision: single or multiple revenue sources?
Category: Business and Money
Asked by: shangul-ga
List Price: $20.00
Posted: 08 Feb 2006 14:31 PST
Expires: 10 Mar 2006 14:31 PST
Question ID: 443285
Assuming everything else being the same, which Startup has a higher
chance of success; the one that targets one source of revenue or the
one that projects the same total profit but through multiple sources
of revenues?
Answer  
There is no answer at this time.

Comments  
Subject: Re: Strategic startup decision: single or multiple revenue sources?
From: ubiquity-ga on 08 Feb 2006 19:45 PST
 
The results are the same (i.e. Expected return).  What is different
would be the standard deviation.  If the multiple revenue sources are
independant of one another, it would likely be safer (i.e. more likely
to get that expected return).
Think of it as being similar to investing in one stock verse investing
in many.  Investing in many (diversifying) is safer (because a loss
peculiar to a single stock would not effect the portions attributed to
other stocks), but it does not increase your expected return.  Also,
diversification may limit loss, it liekwise limits upside.  So keep
that in mind to.
Subject: Re: Strategic startup decision: single or multiple revenue sources?
From: ubiquity-ga on 08 Feb 2006 19:46 PST
 
In sum, the cnaces are the same.
Subject: Re: Strategic startup decision: single or multiple revenue sources?
From: shangul-ga on 09 Feb 2006 13:49 PST
 
Well, I am not sure if we can compare that with stock diversification.
In case of startups you have human factors involved. You can have all 
your sales/marketing staff going after one revenue source, or spread them 
around multiple sources. From pure mathematical point of view it 
may increase the chance of making ?any revenue? at all, but I am 
wondering if it would increase the chance of successful growth for a company!
Subject: Re: Strategic startup decision: single or multiple revenue sources?
From: salescoach-ga on 21 Feb 2006 10:22 PST
 
Excellent comments from both. My 2 cents are these.

1. By sources, do you mean 3 different products lines, 3 different
manufacturing processes, 3 diff. business lines.  This is way more
difficult to do if you are a FIRST time startup entrepreneur.   If
they are SIMILAR to each other, that is anther story.

2. If you mean 1 product to 3 markets, I would suggest concentrating
on 1 market (the one most familliar/studied/researched) and it NOT
need be the biggest in terms of money.

Bottom line, do you want to be a BIG fish in a SMALL pond or a SMALL
fish in a BIG pond.  You should answer that honestly first.  My advice
would be being a BIG fish in a small pond, concentrate resources,
become an expert in this market, build a reputation, clients,
testimonials before you tackle a new (not new product) market.

Hope that helps.

Important Disclaimer: Answers and comments provided on Google Answers are general information, and are not intended to substitute for informed professional medical, psychiatric, psychological, tax, legal, investment, accounting, or other professional advice. Google does not endorse, and expressly disclaims liability for any product, manufacturer, distributor, service or service provider mentioned or any opinion expressed in answers or comments. Please read carefully the Google Answers Terms of Service.

If you feel that you have found inappropriate content, please let us know by emailing us at answers-support@google.com with the question ID listed above. Thank you.
Search Google Answers for
Google Answers  


Google Home - Answers FAQ - Terms of Service - Privacy Policy