Phillips: Implementation revenue is worse than zero for software startups
Ned Phillips · He raised $20M, hit $3.5M in revenue—& failed. Here are the top 3 lessons he learned. | Ned Phill... · PMF Show · Feb 6, 2025 · at 15:56
Ned Phillips, founder of fintech startup Bamboo, reflects on why relying on non-recurring enterprise customization fees damaged his company.
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“I actually tell founders today, implementation revenue is not money. It's not zero. It's worse than zero.”
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More from Ned Phillips
Startups must refuse enterprise customization or charge multi-million dollar fees
“If you're good accustomed, take a choice. It's, and it's extreme either say no and don't do it and stick to your product. Or say yes, but charge masses, like multi-million, five million for the customization.”
Phillips: Founders must never blame macroeconomic headwinds for business failure
“If you're the captain of a ship and it sails home victorious, it was the crew. If you sink it, see, It's you, the captain, but it's never the wind. It's never the wind. The wind is the wind, right? There's nothing you can do about the wind.”
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“The single reason is that our product kept getting customized for every customer.”
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“The middle road is what kills you. The middle road of taking a hundred K, 200 K for customization that takes six months. You end up losing gross margin to get this magical ARR that every VC wants.”
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