The Naked Truth 2009 Revenue Metrics

The Naked Truth 2009
The Naked Truth: an annual Redfin-hosted summer event to offer entrepreneurs pragmatic advice
This year’s theme: Show Me the Money
Revenue models for consumer Internet startups
July 9, 2009, Olympic Sculpture Park
500 registered attendees
Four entrepreneurs presented #s on monetizing 100K visitors
Glenn Kelman, Redfin
Ethan Lowry, UrbanSpoon
Jonathan Sposato, Picnik
Brad Jefferson, Animoto
Four experts discussed industry-wide trends
Michael Arrington, TechCrunch
Damon Darlin, New York Times
Fred Wilson, Union Square Ventures & A VC
Fred Vogelstein, Wired
Three sponsors
Madrona Venture Group
Fenwick & West
Square 1 Bank
Join the discussion
Seattle 2.0 streamed the event: http://blog.redfin.com/2009/07/nakedtruthvideo.html
Twitter: #nakedtruth

100,000 unique visitors
40,000 from Google (0 paid)
1,380 new registrants
60 new qualified clients, 24 partner referrals
82 unqualified (can’t get a loan) clients
124 days to revenue, 4.8 service requests per client
8 booked deals, 1.5 booked referrals
$61,825 / 100,000 unique visitors
96.5% direct: $7,520 per client, 20% gross margin
3.5% referral: $1,110 per client, 50% gross margin
Lessons learned
Reviews: increased conversion 36%
Simple calls to action: increased conversion 16%
First response: the golden-hour

Visitors
web: 74% Google
mobile: 99% iPhone
Revenue per 100k visitors
web: $2k
mobile: $5k
Revenue sources
Affiliate networks ($0 CPM)
Ad networks ($1 - $3 CPM)
Brand advertising ($5 - $15 CPM)
Citysearch ads (much more)
Lessons learned
iPhone and direct visitors view >2x more pages
Heavy SEO focus: 3%-5% monthly growth
Apple commercial: 300% growth

Revenue Sources
80% Picnik Premium Subscriptions
20% advertising
100,000 unique visitors (unpaid)
44.3K Direct Traffic
30.3K Search Engines
16.8K Referring Sites
16.2K (or 20.8K *) new registrants
Premium $’s earned per 100,000 uniques
$2,000 / 100,000 unique visitors
$9,145 / 100,000 new unique visitors
Premium buyers predominantly 19+ yrs old.
50.18% buy on 1st visit, 75% buy within 4 visits
0 – 14 “days to revenue”
Renewal rate = ~64%
~40% gross margin
What saves our hide: fixed costs low. marginal costs low for new features.
What else saves our hide: ad revenues
Lessons learned
Partnerships are not nirvana
We’re retail: new features and constant product freshness seem key to revenue generation
Point of purchase execution has huge impact on sales
ROI on features counter-intuitive.
Must manage backend costs; can have bigger impact on margins than top-line sales.
Press and reviews helpful, but viral WOM true drivers
We’re still at rock bottom. Lots of headroom to optimize site’s points of purchase further…