Turning your idea into a business
Roan Lavery

The plunge

Who needs a business model anyway?
- Dick Costello, Feedburner
“With this kind of traffic, we'll figure it out”
- John Doerr, Google Board
http://www.burningdoor.com/askthewizard/

Web app business models Advertising
34%
Payments
32%
Subscription
14%
Long game
6% 3rd party supported
14%
http://www.boxuk.com/blog/monetizing-your-web-app-business-models

Free love

The psychology of free

Free love?
Critical mass
Advertising down
User costs
Bandwidth
Storage
Support
Scaling

“The problem with free is that every time you double the size of
your database the cost of maintaining the site grows 6 fold. The
bigger you get as a free site the less money you make per visit
and the more it costs to service a visit.”
- Markus Frind

Make ‘em pay

Individual
~ x 10
Business

200 users @ £20 per month = £4,000
a month
= £48,000 a year
4000 users @ £20 per month =
= £960,000 a year
CHA CHING!!

Topica Freelancers in service industries
Geographical UK based (mostly)

http://www.omnisio.com/startupschool08/david-heinemeier-hansson-at-startup-school-08

Freemium

conversion rate = 2.5%
cost per user = £2 a
year
Total Users
4000 paying @ 156,000
£960,000 - £320,000 =
£640,000

March 2007

May 2009
there it is!

Freemium Subscription + free trial
Daily Sign ups Revenue

Lessons learned
Find your niche audience
Charge people!
Be careful about what you give away
Creative with business models
Agile business development

Any questions?
Roan Lavery
roan@freeagentcentral.com
follow: @roanlavery & @freeagentapp
Attributio
http://www.flickr.com/photos/guy_incognito/47600607/
http://www.flickr.com/photos/picsandpics/3395713506/
http://www.flickr.com/photos/digitalsextant/1806620459/
http://www.flickr.com/photos/15589195@N04/2128900152/
http://www.flickr.com/photos/drb62/457354545/
http://www.flickr.com/photos/greenshock/44793290/
http://www.flickr.com/photos/bebebeaux/2956060052/
http://www.flickr.com/photos/undaunted/488622130/
http://www.flickr.com/photos/ihtatho/627226315/
http://www.flickr.com/photos/ciordia/2241906999/
http://www.flickr.com/photos/lucy_baxter/3326890764/