Founder stories: A scientific approach to end-to-end revenue generation
Growing revenue is a science, not an art. Growblocks helps companies unlock their revenue potential in a data-driven way. We sat down with CEO & Co-founder Toni Hohlbein to learn more about his experience building a VC-backed business from scratch.
What inspired you to start Growblocks?
I have worked in different startups over time - from revenue operations to becoming Chief Revenue Officer. After the pandemic, the company I was working for at the time was eventually sold to Xero - and I was looking for a new challenge. My now Co-founder was in a similar position, so we started exploring some ideas. We noticed that a full end-to-end revenue tool was missing, and this is what eventually became Growblocks: A tool allowing revenue teams to do everything from revenue modelling and planning to monitoring and analytics.
Was being a founder something you always wanted to do?
There was always the urge to start my own business, and both my co-founder and I had developed experience over the years that gave us the confidence to give it a try. Looking back, there was definitely a little bit of arrogance and ignorance involved when it comes to what it actually means to be a founder - and how difficult it can be. I am still very happy that we took that risk. You never want to end up at a point in your life where you didn’t at least try.
As a founder, what are some of the challenges you have been facing in the last couple of months and how did you overcome these?
Time management has definitely been one. As a founder, you naturally start off with a really small team so you end up having to deal with all these different tasks. Unfortunately, you only have limited time and, in some cases, you may also not have the experience which means that you will have to spend even more time acquiring knowledge and skills to perform some of these tasks on your endless To-do list.
What I have learned is that you need to choose wisely what you are focusing your time on. It’s worth outsourcing certain tasks to people who can do them better or more efficiently: that’s how we came across Scaleup FInance. It’s great that I no longer have to spend hours on strategic or operational finance tasks. Now I can focus on other essential aspects of building and growing Growblocks.
Before starting your own business you probably had expectations of what being a founder would be like. What were those and how do you reflect back on this now? What surprised you?
When you are employed in a startup or company of a certain size and maturity, you dismiss some of the really important things that you need. You need to find product-market fit, build a brand, get your operations and processes in place - the list is endless.
When we started Growblocks, I was aware that things may not be easy all the time but I completely underestimated the time and energy necessary to develop some of the building blocks every startup needs. My experience is that when you are in the position of an employee rather than a founder, you take a lot of these things for granted. Theoretically, I should have been aware of the amount of work necessary to get things up and running because I worked for startups before and somehow I still ended up being surprised in some instances.
On top of that, the process of building your own business is an emotional rollercoaster. You have days where you may be getting great feedback from potential investors - which puts you in a great mood - and then 5 minutes later you receive an email from a customer who isn’t happy with your product. I am just having to constantly switch between ups and downs so much more than I originally expected.
What has been one of the biggest learnings on your founder journey so far?
When we started Growblocks, we didn’t have a product ready to sell. What I learned quite early on was that even when you don’t have a product to sell yet, you still have a story to share. That’s why I became very active on LinkedIn - to share that story and use it to start positioning Growblocks as a Brand very early on. I definitely had to step out of my comfort zone here because I am naturally more of an introvert. It’s definitely been worth it though because it’s become one of the most valuable channels for Growblocks as a Brand.
Reflecting back on your founder journey, what piece of advice would you want to give others thinking of starting their own business?
When building your own company, one thing you will have to make sure is being noticed. Some startups don’t make it in the long run because their product isn’t good enough. But one of the major risks that I see a lot of founders underestimate is not building out enough top funnel. Your product can be the most amazing thing but that won’t help you if people don’t know about it - so go out there and make as much noise as possible!
FAQs
All the answers you need for all the questions you’ve got.
(But also TL;DR)
How should a startup business prepare its budget?
To prepare a budget for your startup, begin by listing all potential expenses you anticipate in starting and operating your business. Next, organise these expenses into categories. After that, estimate your monthly revenue and calculate the total costs required to start and run your business.
What are the key steps to creating an effective budget?
Step 1: Determine and track your income sources.
Step 2: Make a list of your cost. Include both fixed and variable costs.
Step 3: Set achievable financial goals.
Step 4: Develop a plan to meet those goals.
Step 5: Put everything together to build your budget.
Step 6: Regularly review and revise your forecast to ensure it remains effective.
What does capital budgeting entail for a startup?
Capital budgeting for a startup involves allocating a set amount of funds for specific purposes, such as purchasing new equipment or expanding business operations. This process is crucial as it supports making strategic investments that are expected to yield long-term benefits for the startup.
FAQs
All the answers you need for all the questions you’ve got.
(But also TL;DR)
How can a startup forecast its cash flow?
To forecast cash flow for a startup, follow these steps:
Step 1: Create a sales forecast by estimating the revenue your products or services will generate over the forecast period.
Step 2: Develop a profit and loss forecast to understand your expected expenses and income.
Step 3: Prepare your cash flow forecast, which involves calculating expected cash inflows and outflows. This can often be done for longer-term by using assumptions around payment terms to forecast a Balance Sheet, and using the movements in Balance Sheet and Net Profit/Loss to calculate the cashflow.
Step 4: Consider ways of improving cash flow by improving your invoicing methods, considering short-term borrowing, and negotiate better payment terms to manage cash flow effectively.
What is the most accurate method to forecast cash flow?
The most accurate method for forecasting cash flow in the short-term is the direct method, which utilises actual cash flow data. In contrast, the indirect method is better suited for longer term forecasting using projected balance sheet movements and income statements to estimate future cash flows.
How is cash flow calculated?
Cash flow is calculated by deducting cash outflows from cash inflows over a specific period. This calculation alongside forecasts of future cash flow helps determine if there is sufficient money available to sustain business.
How do you project cash flow over three years?
To project cash flow over a three-year period, undertake the following steps:
Step 1: Collect historical financial data.
Step 2: Identify all expected cash inflows, which could include revenue, investment, grant income, etc.
Step 3: Estimate all anticipated cash outflows including expenses, suppliers that need to be paid, investments into assets, debt repayments, etc.
Step 4: Calculate the net cash flow by subtracting outflows from inflows.
Step 5: Consider your cash reserves and explore financing options if needed.
Step 6: Regularly review and adjust your projections to ensure accuracy and relevance.
FAQs
All the answers you need for all the questions you’ve got.
(But also TL;DR)
When should a startup consider hiring a CFO?
A startup should think about hiring a Chief Financial Officer (CFO) when it begins to experience rapid growth, finds it challenging to manage finances, or needs to navigate complex investment scenarios. A seasoned financial professional can provide the necessary expertise to handle these challenges effectively.
What are the indicators that my business might need CFO support?
You might need to hire a CFO or consider outsourcing this role if you notice any of the following signs: a decrease in gross profit margins despite increasing revenue, uncontrolled business growth, lack of cash reserves despite having a financially successful year, or a halt in business growth.
Does my startup really need a full-time CFO?
Recruiting a full-time CFO is an expensive hire. Given budget constraints and the need to prove the viability of your business idea, founders will often need to prioritise investing into building and commercialising their product. That's where CFO services for startups are a cost-effective solution for founders looking to take their financial management to the next level.
