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How To Convert Underpants Into Profits
- 1. How To Convert Underpants Into Profits by Alex Calic
- 2. Who Am I? • Chief Revenue Officer @ The Media Trust • 10+ years in tech (internet/software) – adtech, social, video, ecommerce, mobile • Previously @: – Clearspring: Bus Dev, Sales, Finance – InPhonic: Corp Dev, Bus Dev, Product – Coremetrics: Bus Dev – InTouchPOS: Strategy • Wharton MBA
- 3. South Park Season 2: http://www.southparkstudios.com/clips/151040/the-underpants-business
- 4. Option #1 Selling To Your Users
- 5. Selling To Your Users Transaction Subscription Consumer Enterprise
- 6. Option #2 Selling To Your Users
- 7. Selling Your Users • Attention • Data (email, behavior, personal information)
- 8. Best of Both Worlds • Monthly subscription fees • In-program advertising
- 9. Figure Out Thanks! Your Unitized TEST Economics
- 10. Income Statement Basics PER USER Revenues - Cost of Sales Gross Margin - Marketing Expense Operating Margin
- 11. Business Levers
- 12. Matching Revenues to Cost • Fixed vs. variable cost structure Seat License Project Based Pay Per Use Cost Time
- 13. Some Thoughts on Freemium Reallocating cost of sales & marketing expenses Paying Users Total users x avg. cost per user per period Total Cost Supported % of total users that pay = By Each Paying User
- 14. User Acquisition Costs • Inbound (free) Free and cheaper – Organic acquisition cost – Referral channels can drive – Search (free/paid) down revenue • Outbound (paid) requirements and enhance the user – Email acquisition loop. – Display – Sponsorship
- 15. Cash Flow Considerations • Sales cycle – Consumer vs. enterprise (short vs. long) • Payment cycle – Upfront vs. arrears (fixed vs. usage pricing) • Churn – Monthly billing vs. contracts (variable vs. fixed costs)
- 16. Advertising Model • First leveraging standards (ad units/ sellers) • Native advertising requires scale – 10MM active users as a starting point – 100MM for audience targeting • What you’re up against
- 17. TEST
- 18. Ways to Find the Right Pricing • Competitors • Comparable business models/industries • A/B testing • Step-up pricing • Just ask! • Most importantly: KISS
- 19. Thanks For Having Me! • alex@themediatrust.com TEST • @alexcalic • www.alexcalic.com