About me.MBA, Rotman SchoolMSc, Software Engineering, Queens2002-2008: product manager / architect, IBMR&D, WebSphere Commerce team.Then a serial entrepreneur with companies Ross McKegneyin media and design. Currently CTO at @rossmckegneyVerold, the leading online collaborativeplatform for artists/designers of 3D assets(gaming and animation). Part-time professorat the UOIT business school.
e.g. User Base MetricsRegistrations (Customers who completed the registration process during the month)Activations (Customers who had activity 3 to 10 days after they registered. Measuresonly customers that registered during that month)Activation/Registrations %Retained 30+ DaysRetained 30+/ Total Actives %Retained 90+ DaysRetained 90+/Total Actives %Paying Customers (How many customers made $ purchases that month)Conversion rate: Paying/(Activations + Retained 30+)
ForecastingYour forecast will be wrong, embrace that.But it is still an important exercise.Once you have a plan in place for metrics, plugthe numbers into a formula like:http://andrewchen.co/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/
Funnel, Users vs CustomersAt a high level, there’s what is happening:● Each time period, a bunch of newly registered users come in (both acquired through ads or through viral marketing)● Some % of these users convert into paying users● Some % of these users then send off viral invites● Revenue is generated by building up a base of paying users● Cost is generated through building up a base of active users (paying or not!)