Startup Funding Espresso Base Rate Fallacy
b"Base Rate Fallacy Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. The base rate fallacy is a cognitive bias defined by Wikipedia as the tendency to ignore base rate information (generic, general information) and focus on specific information (information only pertaining to a certain case). One-off sales to specific companies while helpful do not define the startup's growth forecast.\\xa0 Investors should look at the core systems of a startup to understand their acquisition, conversion, and revenue. Consulting work and other non-recurring revenue models make it difficult to predict revenue. Recurring revenue becomes a strong indicator of future revenue growth. To overcome the base rate fallacy look for metrics across a broader range of customers and not select ones.\\xa0 The presence of metrics is a good sign.\\xa0\\xa0 The absence of metrics is a bad sign. Focus on recurring revenue metrics to understand the acquisition, activation, and retention rates. Hockey stick projections should be avoided as it assumes something will occur outside the normal operations of the business to take the company\\u2019s revenue higher. \\xa0 Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.Let\\u2019s go startup something today. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: \\xa0 Check out our other podcasts here: \\xa0 For Investors check out: \\xa0 For Startups check out: \\xa0 For eGuides check out: \\xa0 For upcoming Events, check out \\xa0\\xa0 For Feedback please contact info@tencapital.group\\xa0\\xa0\\xa0 Please , share, and leave a review. Music courtesy of ."