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Pipeline is not Backlog
An opportunity pipeline is not signed revenue. Conversion is the whole game.
What to check
- Is it pipeline (potential) or backlog (signed orders)?
- What is the historical conversion rate?
- Over what timeframe does it actually convert?
The trap
A growing pipeline number feels like growth. Nothing is booked until it converts.
Rule of thumb
Backlog you can almost bank. Pipeline you have to discount.
How to apply
- 1Split pipeline from backlog.
- 2Apply a conversion haircut.
- 3Watch the conversion trend, not the headline size.
Educational content, not financial advice. A mental model you apply yourself, not a stock pick. Do your own research.