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Turning your idea into a business

Turning your idea into a business

Presented at the Future of Web Apps 2009

Roan Lavery

May 27, 2009
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  1. View Slide

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  3. Turning your idea into a business
    Roan Lavery

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  4. View Slide

  5. The plunge

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

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

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

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

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  10. 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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  11. 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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  12. Free love

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  13. The psychology of free

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

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  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

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  16. Make ‘em pay

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  17. Individual
    Business
    ~ x 10

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  18. View Slide

  19. = £48,000 a year
    200 users @ £20 per month = £4,000 a month

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  20. 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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  21. 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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  22. Topical
    Geographical

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  23. Topical Freelancers in service industries
    Geographical

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  24. Topical
    UK based (mostly)
    Freelancers in service industries
    Geographical

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

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  26. Freemium

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

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

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

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

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  31. £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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  32. March 2007

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  33. May 2009

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  34. there it is!
    May 2009

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  35. Freemium Subscription + free trial
    Daily Sign ups Revenue

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  36. 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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  37. View Slide

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  39. 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/[email protected]/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

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