The Profitable Startup


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User growth and feature enhancements are the building blocks towards the early success of a startup, but as a startup becomes a company, it needs to be able to stand on its own. Monetizing a startup can be a harrowing and heart wrenching experience, since many companies put off these integrations until a product is established, leaving them with little choice but to resort to traditional monetization methodologies like advertising, since any model doesn't fit their current product state, but it doesn't have to be that way.

Through working with thousands of startups within PayPal innovation programs and beyond, we have seen how early adoption of proper monetization methodologies can provide you with creative solutions for building a financial backing into your startup, without ever having to resort to hard selling your users to help keep you profitable; the same users who built your product to begin with.

Exploring these principles, we'll see how essential creative monetization principles are towards building a strong backbone into a startup, helping it survive the trials of feature and user growth.

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  • Companies tend to focus singularly on growth in early stages, because that’s how they’re measured by investorsExplosive growth usually requires $ behind it to iterate quicklyOnce you hit this level, investors will be pushing you for feature improvements
  • Soon your site will lose its visual appeal as it’s covered up by advertisingThere’s a reason why advertising is easy
  • Physical goods, digital goods, data sales, personalization
  • Tell the story of Instamojo
  • Singular identity allows you to log in
  • Removing the registration form
  • Crowdfunding + groups
  • In either case,
  • Tell the story of the two music crowdfunding applications – 1 got in and 1 didn’t
  • Tell story of group funding
  • How do these stores make money off of data sales?Tell story of Target (physical locations) and (digital locations)
  • Based onBrowsing habits,Time on page / time of year,LocationRecommendations + targeted advertising
  • The Profitable Startup

    1. 1. The Profitable Startup Jonathan LeBlanc (@jcleblanc) Head of Developer Evangelism (North America) PayPal | Developer
    2. 2. The Problem… A Relentless Focus on User Growth
    3. 3. The Digital Revolution
    4. 4. Physical Costs Price of Goods Storage Shipping Returns … Digital vs. Physical Goods Digital Costs …a few bytes
    5. 5. The Problems with the Model Chargebacks and fraud Copyright owner concerns Tracking buyers
    6. 6. Preventing Fraud: Tracking Buyers Email domain type User browsing & buying habits Manual review Device Fingerprinting IP to billing address location
    7. 7. More on Device Fingerprinting Browser characteristic Bits of identifying information 1 in x browsers with same characterists User Agent 12.01 4117.11 Browser Plugin Detail 6.8 111.13 Time Zone 21.6+ 3178409 Screen Size / Color Depth 4.56 23.58 System Fonts 21.6+ 3178409 Cookies Enabled? 0.44 1.35 Limited Supercookie Test 0.98 1.97
    8. 8. Mobile as a Primary Citizen
    9. 9. Working with the App Stores Any product that can be purchased from the app store needs to be Physical goods are ok – Use a WebView Construct a wrapper the handle cross- device requests
    10. 10. Working with These Models Responsive, cross-platform HTML5 web applications Reduce the number of screens to checkout Use knowledgeable identity systems
    11. 11. Data Reduction with Identity
    12. 12. Identity to Remove Complexities
    13. 13. Creating with a Crowd
    14. 14. Crowdfunding vs. Group Funding Many people funding a single individual to perform an end action Many people funding an end action
    15. 15. Why Crowdfunding is so Hard Tracking money to its final source Vetting project owners Time to payment charge Handling chargebacks Very poor history of success
    16. 16. Group Funding Decisions Short term vs. long term money holding Direct payment to 1 person or auth /capture model? Who is responsible for chargebacks / refunds?
    17. 17. Building on a Data Backbone
    18. 18. An Old Addage "If you aren't paying for the product, you are the product"
    19. 19. Data Responsibility Personalize, don’t abuse Anonymizing the data sources
    20. 20. The Problems with the Model Long time until the data becomes profitable Narrow data focus area means limited uses
    21. 21. Using our Building Blocks
    22. 22. Optimists consider that up to a 30% of ecommerce sales increase is thanks to cross-selling recommended products fikobservatory Personalized Recommendations
    23. 23. Changing Action to Intent Traits of the Bored Distraction Repetition Tiredness Reasons for Boredom Lack of interest Readiness
    24. 24. Thank You! Jonathan LeBlanc (@jcleblanc) Head of Developer Evangelism (North America) PayPal | Developer