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.

Transcript of Turning your Big Idea into a Business

Thursday, 28 May 2009

Thursday, 28 May 2009

Turning your idea into a businessRoan Lavery

Thursday, 28 May 2009

Thursday, 28 May 2009

The plunge

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Who needs a business model anyway?

- Dick Costello, Feedburner

http://www.burningdoor.com/askthewizard/

Thursday, 28 May 2009

Who needs a business model anyway?

- Dick Costello, Feedburner

http://www.burningdoor.com/askthewizard/

Thursday, 28 May 2009

Who needs a business model anyway?

- Dick Costello, Feedburner

http://www.burningdoor.com/askthewizard/

Thursday, 28 May 2009

Who needs a business model anyway?

- Dick Costello, Feedburner

http://www.burningdoor.com/askthewizard/

Thursday, 28 May 2009

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/

Thursday, 28 May 2009

Web app business models Advertising34%

Subscription14%

3rd party supported14%

Long game6%

Payments32%

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

BandwidthStorageSupportScaling

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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 year200 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 year200 users @ £20 per month = £4,000 a month

Thursday, 28 May 2009

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

CHA CHING!!

= £48,000 a year200 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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Lessons learnedFind your niche audience

Charge people!

Be careful about what you give away

Creative with business models

Agile business development

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Any questions?Roan Laveryroan@freeagentcentral.comfollow: @roanlavery & @freeagentapp

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

Thursday, 28 May 2009