Turning your Big Idea into a Business

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A look at different web app business models including advertising, freemium and subscription, and the choices that startups face when trying to generate revenue from an application.

Published in: Technology, Business

Turning your Big Idea into a Business

  1. 1. Thursday, 28 May 2009
  2. 2. Thursday, 28 May 2009
  3. 3. Turning your idea into a business Roan Lavery Thursday, 28 May 2009
  4. 4. Thursday, 28 May 2009
  5. 5. The plunge Thursday, 28 May 2009
  6. 6. Who needs a business model anyway? - Dick Costello, Feedburner http://www.burningdoor.com/askthewizard/ Thursday, 28 May 2009
  7. 7. Who needs a business model anyway? - Dick Costello, Feedburner http://www.burningdoor.com/askthewizard/ Thursday, 28 May 2009
  8. 8. Who needs a business model anyway? - Dick Costello, Feedburner http://www.burningdoor.com/askthewizard/ Thursday, 28 May 2009
  9. 9. Who needs a business model anyway? - Dick Costello, Feedburner http://www.burningdoor.com/askthewizard/ Thursday, 28 May 2009
  10. 10. Who needs a business model anyway? - Dick Costello, Feedburner “With this kind of traffic, we'll figure it out” - John Doerr, Google Board http://www.burningdoor.com/askthewizard/ Thursday, 28 May 2009
  11. 11. Web app business models Advertising 34% Payments 32% Subscription 14% Long game 6% 3rd party supported 14% http://www.boxuk.com/blog/monetizing-your-web-app-business-models Thursday, 28 May 2009
  12. 12. Free love Thursday, 28 May 2009
  13. 13. The psychology of free Thursday, 28 May 2009
  14. 14. Free love? Critical mass Advertising down User costs Bandwidth Storage Support Scaling Thursday, 28 May 2009
  15. 15. “The problem with free is that every time you double the size of your database the cost of maintaining the site grows 6 fold. The bigger you get as a free site the less money you make per visit and the more it costs to service a visit.” - Markus Frind Thursday, 28 May 2009
  16. 16. Make ‘em pay Thursday, 28 May 2009
  17. 17. Individual ~ x 10 Business Thursday, 28 May 2009
  18. 18. Thursday, 28 May 2009
  19. 19. 200 users @ £20 per month = £4,000 a month = £48,000 a year Thursday, 28 May 2009
  20. 20. 200 users @ £20 per month = £4,000 a month = £48,000 a year 4000 users @ £20 per month = £80,000 a month = £960,000 a year Thursday, 28 May 2009
  21. 21. 200 users @ £20 per month = £4,000 a month = £48,000 a year 4000 users @ £20 per month = £80,000 a month = £960,000 a year CHA CHING!! Thursday, 28 May 2009
  22. 22. Topical Geographical Thursday, 28 May 2009
  23. 23. Topical Freelancers in service industries Geographical Thursday, 28 May 2009
  24. 24. Topical Freelancers in service industries Geographical UK based (mostly) Thursday, 28 May 2009
  25. 25. http://www.omnisio.com/startupschool08/david-heinemeier-hansson-at-startup-school-08 Thursday, 28 May 2009
  26. 26. Freemium Thursday, 28 May 2009
  27. 27. conversion rate = 2.5% cost per user = £2 a year Thursday, 28 May 2009
  28. 28. conversion rate = 2.5% cost per user = £2 a year Total Users 160,000 Thursday, 28 May 2009
  29. 29. conversion rate = 2.5% cost per user = £2 a year Total Users 160,000 4000 paying @ £20 Thursday, 28 May 2009
  30. 30. conversion rate = 2.5% cost per user = £2 a year Total Users 160,000 4000 paying @ £20 156,000 free Thursday, 28 May 2009
  31. 31. conversion rate = 2.5% cost per user = £2 a year Total Users 160,000 4000 paying @ £20 156,000 free £960,000 - £320,000 = £640,000 Thursday, 28 May 2009
  32. 32. March 2007 Thursday, 28 May 2009
  33. 33. May 2009 Thursday, 28 May 2009
  34. 34. May 2009 there it is! Thursday, 28 May 2009
  35. 35. Freemium Subscription + free trial Daily Sign ups Revenue Thursday, 28 May 2009
  36. 36. Lessons learned Find your niche audience Charge people! Be careful about what you give away Creative with business models Agile business development Thursday, 28 May 2009
  37. 37. Thursday, 28 May 2009
  38. 38. Thursday, 28 May 2009
  39. 39. Any questions? Roan Lavery roan@freeagentcentral.com follow: @roanlavery & @freeagentapp Attribution http://www.flickr.com/photos/guy_incognito/47600607/ http://www.flickr.com/photos/picsandpics/3395713506/ http://www.flickr.com/photos/digitalsextant/1806620459/ http://www.flickr.com/photos/15589195@N04/2128900152/ http://www.flickr.com/photos/drb62/457354545/ http://www.flickr.com/photos/greenshock/44793290/ http://www.flickr.com/photos/bebebeaux/2956060052/ http://www.flickr.com/photos/undaunted/488622130/ http://www.flickr.com/photos/ihtatho/627226315/ http://www.flickr.com/photos/ciordia/2241906999/ http://www.flickr.com/photos/lucy_baxter/3326890764/ Thursday, 28 May 2009

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