Sales Forecasting For a Mobile Startup

I recently answered a LinkedIn question about sales forecasting for a mobile startup.

The question:
“Mobile Start-ups are not as easy to forecast, at least in my opinion, as some other types of businesses. Obviously VCs and investors understand your projections are essentially fabricated and pure guesses, but how would you go about forecasting sales of a mobile application, especially given the environment of the app store hiding number of downloads for potential competitors?”

My response:
“Actually I’ll argue that mobile startups are much easier to forecast than most other types of businesses. When you start a business all you have are guesses/hypotheses about who your target market will be, what they want in a product, how you will reach them, how much they will pay for it, etc. In a mobile startup the barriers to test those hypotheses are much lower than in most other types of businesses. In a few months and for a few thousands-not-millions of dollars you can develop a minimum viable product,and begin experimenting with different techniques to drive conversions/sales. This type of validated sales forecasting is worth infinitely more than made-up numbers (wishes which will be thrown out by any investor anyway) and will put you in much stronger negotiating position if indeed you do seek investment.

If you are desperate for comparables, though, check out the Google Play Store, which does publish download numbers.”

What do you think, is this a useful answer or just lean startup soap boxing?

Published by Bryan Guido Hassin

These are the musings of a global cleantech entrepreneur. This blog began as a way to document my experience during the IMD MBA in Switzerland and now is the place where I publish eclectic thoughts on business, politics, fitness, entertainment, travel, wine, sports, and . . . whatever else is top of mind.

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