A Crystal Ball for your Internet Startup August 30, 2009 Mike Koss – StartPad.org StartupWeekend – BizSpark/Redmond

Your Site = Social Experiment

Predictions How many unique visitors will you eventually have? What will be your maximum revenue? What is the life-time value of a new customer? How much is your business worth? How can you improve the above?

How many unique visitors will you eventually have?

What will be your maximum revenue?

What is the life-time value of a new customer?

How much is your business worth?

How can you improve the above?

A Simple Model Active User Base New Users Leave Stay % (Attrition)

A Simple Example Max User Base = New Users/Attrition_rate (1,000)

What Can Change? # of New Users: Search Engine Optimization (SEO) Paid Ads PR or “Events” The user type : May have different expectations or be more or less inclined to join Attrition rate (through site improvements or active engagement, e.g. email)

# of New Users:

Search Engine Optimization (SEO)

Paid Ads

PR or “Events”

The user type :

May have different expectations or be more or less inclined to join

Attrition rate (through site improvements or active engagement, e.g. email)

StartPad.org

Example (cont) 958 Unique (Last Month) 836 New Leave 89 Returns 91% (Attrition) Prediction: User Base Peak = 836/91% = 919

A “Freemium” Model Organic New Users Paid Viral Free Trial Users % Conversion Rates % % $$$ Subscription Users Referrals % Leave % Leave %

Data Collection Customization of Google Analytics Needed User Defined variable can be used to tag each user as “Paid”, “Referral”, “Trial”, or “Subscriber” “Cohort Analysis” Track individual users by month they first visited your site (or signed up for an account) Track each cohort monthly to see % returning

Customization of Google Analytics Needed

User Defined variable can be used to tag each user as “Paid”, “Referral”, “Trial”, or “Subscriber”

“Cohort Analysis”

Track individual users by month they first visited your site (or signed up for an account)

Track each cohort monthly to see % returning

Summary Understanding your web site dynamics you can predict: Peak User Base (Trials and Subscribers) Expected Lifetime of each user class Lifetime value of each new user Peak Revenue Current Enterprise Value Download Spreadsheet from http://startpad.org/crystal-ball

Understanding your web site dynamics you can predict:

Peak User Base (Trials and Subscribers)

Expected Lifetime of each user class

Lifetime value of each new user

Peak Revenue

Current Enterprise Value

Download Spreadsheet from

http://startpad.org/crystal-ball

Photo Credits http://www.flickr.com/photos/plasticbystander/

http://www.flickr.com/photos/plasticbystander/