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Monetization in the trenches 012511

Monetization in the trenches 012511






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    Monetization in the trenches 012511 Monetization in the trenches 012511 Presentation Transcript

    • Monetization in the trenches
      • Metrics, tips and tricks for making money with software
    • About me
        • I don’t smoke a pipe.
        • Founder and CEO of RescueTime
        • Founded and sold a recruiting software startup
        • Founded and sold a 20ish person web consultancy in Anchorage, Alaska
      • contact:
      • @webwright (Twitter)
      • tony@rescuetime.com (Email)
      • tonywright.com (interweb site)
    • About Rescuetime
        • Helps people get more productive by:
              • showing individuals and businesses exactly how they spend their time and attention (with no data entry!)
              • Giving people tools to focus better including “nudges” or actual blocking of sites under certain conditions.
              • Feature I’m most excited about: “Focus Button”
      • more info:
      • www.rescuetime.com
      • [email_address]
    • Two truths
      • #1: There are virtually no examples of software that people really really love going out of business.
      • #2: The most amazing businesses have a great story about how they make money.
    • Let’s talk about metrics
    • What’s the most important startup metric?
    • Profit!
    • Startup Success funnel
    • Metrics
      • Each step has associated metrics:
              • Visitors / Pageviews (acquisition)
              • Bounce Rate & time on page (“they get it”)
              • Clicking “sign up” (action)
              • Successful signup (signup)
              • Successful credit card charge (purchase)
              • Cohort retention (1st cycle and “happy customer”)
              • Tweets and blog posts (evangelism)
    • Cohort ANALYSIS
              • (But once you have the metrics, which do you work on?)
    • It depends
    • “skinny parts with big opportunities”
      • Find the part of your funnel that gets skinny
      • Take a guess at how “low hanging” the fruit is
      • Goal is maximizing the ratio of time/$ investment and how how much it improves the output
      • When in doubt, aim low on the funnel
    • healthy funnel
      • (Almost! Let’s talk about leverage)
    • Leverage!
      • Leverage is focusing on revenue opportunities that provide ongoing value.
    • low leverage example
      • What’s the biggest thing you could imagine doing to improve your web app metrics this week?
    • Buy a superbowl ad
          • Huge 1-time shot in the arm for traffic
          • Monsterous credibility boost
          • Big acquisition boost moves down the funnel and helps all of your metrics
          • Short Term Result: Big win (100,000 new customers when you normally only get 1,000 per month)
          • Long Term Result: Back down to about 5,000 next month and 1,200 the month after that.
    • high leverage example
      • What one thing could you improve that’d have the biggest effect on profit for the longest period of time?
    • bump retention from 80% to 90% from 80% to 90%
          • No meaningful revenue impact that month.
          • Short Term Result: Meh. You retain 900 of your customers that month instead of 800.
          • Long Term Result: After 1 year, 282 of the 1,000 are still around instead of 68. So a 300% revenue increase for that cohort! (and it’s a gift that keeps on giving)
    • Trip up the funnel!
    • Evangelism & happy customers happy customers
      • Make your product really freakin’ good. Give WAY more value than you ask for.
      • Make your product FEEL really freakin’ good.
      • Make sharing/talking about your product an implicit part of the experience
      • If people start evangelizing on their own, build features that help them do it!
      • Reward evangelism (with love/thanks/recognition)
      • Build features from customer requests
      • Great support (Zappos, Wufoo)
      • Other ideas?
    • 1st cycle retention retention
      • Great new user experience - you’ve only got a minute or two to hook them
      • Nag/survey on abandons - “Hey, we noticed that you didn’t get up and running... What did we miss? Here are a few links to help you out!”
      • Checklists - Give users a list of things to check off to get oriented.
      • Any other ideas?
    • people “get it”, take action, & purchase action, & purchase
      • Beware the “curse of knowledge” - the more you grok your product, the worse you are at explaining it.
      • Action/Signup isn’t about ease. It’s the ratio of how much they care to how easy it is. Make them care more!
      • Minimize steps to signup - less screens, less form fields
      • Don’t sweat fraud - fewer fields means higher credit card transaction costs, but it’s worth it.
      • Minimize Customer Risk with clear pricing, free trials, demos, screencasts
      • Sell Benefits not features.
      • Show, don’t tell.
      • Credibility (design, writing, clear contact info, press coverage)
      • Social Proof - show that other people use/love it
      • BABB - Big ass beveled buttons. Everywhere. With drop shadows.
      • Any other ideas?
    • Acquisition
      • Get enough users to experiment but “solve” the bottom of the funnel if you have the luxury to do so.
      • SEO - it’s slow to build value, but SEO is truly a gift that gives forever.
      • Don’t chase PR - focus on being worth talking about. Empathize with reporters/bloggers and give them a story that rocks.
      • Viral wins, but don’t staple it on - “tell a friend” links don’t work if people don’t think you’re awesome.
      • Word-of-mouth is not a marketing strategy. Seriously.
      • Don’t buy eyeballs unless your conversion and retention are solid.
      • After TechCrunch comes the trough of sorrow. Worth it for SEO, but converts poorly. See “don’t chase PR!”
      • Any other ideas?
    • Questions? comments?
      • Reminder contact info:
      • Me:
      • @webwright (Twitter)
      • [email_address] (Email)
      • tonywright.com (interweb site)
      • RescueTime:
      • www.rescuetime.com
      • [email_address]