Turning your idea into a business

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Turning your idea into a business Roan Lavery

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The plunge

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Who needs a business model anyway? - Dick Costello, Feedburner http://www.burningdoor.com/askthewizard/

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Who needs a business model anyway? - Dick Costello, Feedburner http://www.burningdoor.com/askthewizard/

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Who needs a business model anyway? - Dick Costello, Feedburner http://www.burningdoor.com/askthewizard/

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Who needs a business model anyway? - Dick Costello, Feedburner http://www.burningdoor.com/askthewizard/

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Who needs a business model anyway? “With this kind of traffic, we'll figure it out” - John Doerr, Google Board - Dick Costello, Feedburner http://www.burningdoor.com/askthewizard/

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Web app business models Advertising 34% Subscription 14% 3rd party supported 14% Long game 6% Payments 32% http://www.boxuk.com/blog/monetizing-your-web-app-business-models

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Free love

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The psychology of free

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Free love? Critical mass Advertising down User costs Bandwidth Storage Support Scaling

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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

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Make ‘em pay

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Individual Business ~ x 10

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= £48,000 a year 200 users @ £20 per month = £4,000 a month

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4000 users @ £20 per month = £80,000 a month = £960,000 a year = £48,000 a year 200 users @ £20 per month = £4,000 a month

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4000 users @ £20 per month = £80,000 a month = £960,000 a year CHA CHING!! = £48,000 a year 200 users @ £20 per month = £4,000 a month

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Topical Geographical

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Topical Freelancers in service industries Geographical

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Topical UK based (mostly) Freelancers in service industries Geographical

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http://www.omnisio.com/startupschool08/david-heinemeier-hansson-at-startup-school-08

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Freemium

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conversion rate = 2.5% cost per user = £2 a year

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conversion rate = 2.5% Total Users 160,000 cost per user = £2 a year

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conversion rate = 2.5% Total Users 160,000 cost per user = £2 a year 4000 paying @ £20

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conversion rate = 2.5% Total Users 160,000 cost per user = £2 a year 4000 paying @ £20 156,000 free

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£960,000 - £320,000 = £640,000 conversion rate = 2.5% Total Users 160,000 cost per user = £2 a year 4000 paying @ £20 156,000 free

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March 2007

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May 2009

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there it is! May 2009

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Freemium Subscription + free trial Daily Sign ups Revenue

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Lessons learned Find your niche audience Charge people! Be careful about what you give away Be creative with business models Agile business development

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Any questions? Roan Lavery [email protected] follow: @roanlavery & @freeagent 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/ Attribution