Date post: | 20-Aug-2015 |
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PERSONAL LIBRARIESWEEK 7
Revenue Model & Pivot
Reference Library Product Library
Week 6 Canvas
Upwardly mobile young professionals making $2-10K of discretionary online purchases a year (excluding travel)
Discover online goods recommended by friends at the lowest possible price from trusted vendors
FB/TW posts from users you know
Company blog, FB, TW accounts
Week 7 Canvas
Affiliate program
SEO/SEM/SM
IE/FF/Chrome App Stores
FB/TW posts from cartpop users you know
DevelopersMarketers
Bloggers and Media targeting customer segment
Retail marketing partners
IE/FF/Chrome teams
Affiliate Program Providers
Affiliate program feesLicensingSubscription feesAd revenue
AWS InfrastructureSEMEng & Marketing OpEx
Week 6 Teaching Team Feedback
What category are you in?Do you need to pivot? If so, where to?
How can you test these different categories instead of refining your existing software solution? Do you need to setup simple landing pages for other
ideas, e.g., document management?
Pivoting this late can be really hard
Upwardly mobile young professionals making $2-10K of discretionary online purchases a year (excluding travel)
Discover online goods recommended by friends at the lowest possible price from trusted vendors
FB/TW posts from users you know
Company blog, FB, TW accounts
Week 7 Canvas
Affiliate program
SEO/SEM/SM
IE/FF/Chrome App Stores
FB/TW posts from cartpop users you know
DevelopersMarketers
Bloggers and Media targeting customer segment
Retail marketing partners
IE/FF/Chrome teams
Affiliate Program Providers
Affiliate program feesLicensingSubscription feesAd revenue
AWS InfrastructureSEMEng & Marketing OpEx
Upwardly mobile young professionals making $2-10K of discretionary online purchases a year (excluding travel)
Discover online goods recommended by friends at the lowest possible price from trusted vendors
FB/TW posts from users you know
Company blog, FB, TW accounts
Week 7 Canvas
Affiliate program
SEO/SEM/SM
IE/FF/Chrome App Stores
FB/TW posts from cartpop users you know
DevelopersMarketers
Bloggers and Media targeting customer segment
Retail marketing partners
IE/FF/Chrome teams
Affiliate Program Providers
Affiliate program feesLicensingSubscription feesAd revenue
AWS InfrastructureSEMEng & Marketing OpEx
Key Decisions Complete “Paper Libraries” campaigns
Since it’s a going concern, continue E245 course assignments (revenue model, financial model, etc.) with Peaya
Pivot E245 project to “Product Libraries”Like Peaya, users lookup, organize, annotate, and share their
product information. New concepts include automated comparison shopping and
appraisals of used items.
Drop other investigationsDocument management and verticals (legal, pharmaceutical)
aren’t panning out—too many competitors, too much complexity, we have little expertise, advantage or passion
Personal Libraries
Peaya conservatively pricedBelow niche competitors, above generalists
7M users2.6M active users last month0.25M paid users (~3%)22K new users / dayrevenue >1M / month
2K users0.4K active last week0.008K paid users (0.4%)0.005 new users / dayrevenue ~ 0.05K / month
Endnote Refworks Mendeley Bookend Peaya Evernote
$70-299.95 $100/yr $4.99/month $99 Freemium, $25-50/yr
Freemium, $45/year
Purchase Subscription Subscription Purchase Subscription Subscription
Connecting with Media Outlets
• Hypothesis:
We can develop a direct/SEO channel via bloggers & social networks our audience frequents
• Experiment
Contacted 45 selected bloggers to solicit feedback
Experiment
• Findings
4 positive responses, bloggers want: - Backlink to their blog- Reference chart vs. competitors
• Next steps:
Follow-up to generate reviews
ResearchGate
Academia.edu Epernicus
Posting to Forums manually is easy, but time consuming
Assumptions
Core Freemium (up to ~$180K)- 30x user growth (to 60K users)- 200x conversion (to 10%)- 3x price increase- 2 FT engineers @$40K/year
Ads (up to ~$30K)- $5-10 CPM- 4-10 hours in app- 60K user base
Content Sales (up to ~$30K)- 8-10% affiliate commission- 0.02-0.05% CTR- $15-50 mean purchase price
Personal Libraries could be $240K/year business in 2 years
Product Libraries
Sam the Shopper Upwardly mobile young professional (some Grad Students)Salary: $40,000-$250,000/year
Demographics• Male, aged 18-35• Minimum bachelors from expensive school
Motivation• Craves new tech products• Hates tedious work• Identifies as influencer for tech products• Fears being cheated online
Behavior• Spends 5 hour+ monthly hearing about
products • Shares online and in person about products
he lovesBudget• $2-10K+/year in discretionary online
purchases
“The XXX is awesome, I really want one. I know I just bought the YYY, but it’s probably time to upgrade.”
Value Proposition
Promise• Discover products recommended by respected
friends, available at the lowest possible price, either new from trusted vendors, or used from friends or local sellers
Differentiation • Only social shopping system spanning all major online
retailers, plus local used goods markets.
Evidence• Instantly research a million products with price
history, local availability
Cost• FREE for service• 5% to sell products, escrow service included
Risks• Privacy• Identify/Credit Card Theft• Malicious software on PC
Effort• Account sign-up• Friend adding• Install add-in
Product Libraries Customer Segment & Value Prop Hypotheses
Year
$ billion % change
2004 69
2005 88 27.5
2006 115 30.7
2007 137 19.1
2008 142 3.6
2009 (est.) 144 1.4
2010 (fore.) 161 12.1
2011 (fore.) 181 12.4
2012 (fore.) 208 14.7
2013 (fore.) 235 12.7
2014 (fore.) 261 11.1
SOURCE: Mintel/U.S. Census Bureau,
Annual Retail Trade Survey, March 2010
• Rebound in 2010• Double-digit growth projected• Total market size $200bn+ within 5 years
E-Commerce rebounding, heading to $200B+/year
Only category with sustained increase since 2006 is electronics and appliances.
Apparel and media are by far the most frequent
Electronics growing consistently; Apparel & Books top categories
Categories of internet purchase, 2006-09
May-Oct
2006
Apr-Dec 2008
Apr-Dec 2009
Any internet purchase (all adults (aged 18+)) 54 59 59Apparel/accessories 37 41 54Books/music/video 41 42 39Computer products 20 19 18Toys/games 15 18 16Travel services/packages 19 18 16Electronics/appliances 11 13 15Tickets for events other than movies 17 17 15Footwear/shoes 13 16 14Banking services 12 15 12Sporting goods/equipment 9 13 9Tickets for movies 10 11 9Cosmetics - - 8Prescription drugs 8 9 8Automotive products 8 10 7Home furnishings 9 9 7Housewares 6 6 7Collectibles 8 7 6Food/perishables 7 6 6Giftware 7 7 6Office supplies 9 7 6Other health/medical items 4 5 6Credit cards 7 5 4Gardening 5 5 4Insurance 3 4 4Hardware 3 4 3Educational programs 4 4- Real estate/real estate services 1 2- Religious products 4 4- Stocks/bonds/mutual funds 4 4- Other items 22 23 23 SOURCE: Mintel/Experian Simmons NCS/NHCS, POP/Simmons, June 2010
Popularity of Price Comparison Sites (% used in last month) Male Female All
Yahoo! Shopping or a search on Yahoo! 19 12 15Froogle/Google Search 16 11 13BizRate 14 13 13PriceGrabber 14 8 11NexTag 10 9 9A search on Microsoft Bing 10 7 9Shopping.com 10 8 9AOL Shopping 11 5 8Smarter.com 8 3 5Thefind.com 5 3 4Shopwiki.com 5 3 4Dealtime.com 4 2 3Other price-comparison site 2 2 2
Any 47 37 42
SOURCE: Mintel, March 2010
Usage is widespread
Fragmentation may suggest a lack of differentiation
Men, 25-34-year-olds, and higher earners (more than $75K) are heavy users
Largest comparison shopping sites (~20M UVs) target men 25-34
Shopping tools are largely unsophisticated today
• Coupons, email, review sites dominate • Facebook and video growing in influence• Online ads are relatively weak
• Coupons, email, review sites dominate • Facebook and video growing in influence• Online ads are relatively weak
Shopping tools are largely unsophisticated today
Question 1: What Product Library features resonate best?
MVP Landing page tests
Sample: ~800 subjects, 70/30 male/female, average 2011 income ~$120K
Results: 197 UVs, “Price Recommendations” top choice (~13% CTR), “Don’t be fooled shopping online” (11% CTR)
Benchmarks
Affiliate Revenue - $0.20-$0.30 CPC in apparel/fashion
(Shopzilla)- 5-7% in electronics (Amazon)- 7-10% in digital goods (Amazon)
Comparison Shopping Add-in- $0.4 APRU for electronics (70 user sample)- $0.7 APRU for women’s furnishings- $0.25-0.30 CPC furnishings
Ads- $20-40 CPM premium ads- $3 CPM remnant
Subscriptions- $20-50/year Consumer Reports/Angie’s List
Question 2: What’s the best way to develop revenue streams?
Question 3: Do we go after men, or women?
Pat the ProfessionalSalary: $40,000 – 150,000/yearFinance, Consulting, Public Relations, MarketingKeeps up with trends in fashion and technology
Traits:• Gets ideas from blogs and shopping
websites • Values celebrity trends and friends’
opinions• Wants to buy high ticket items at lowest
price• Interested in shopping opportunities –
either being the first to have something, or getting an alert when a price drops
Purchase Power: • Spends $1,000 – 15,000 in online shopping
per year on discretionary items
Value Proposition• Promise: Save & hassle time
shopping online• Differentiation:
Discover online goods recommended by friends at the lowest possible price from unspammy vendors
• Evidence: Price recommendations, social features
• Cost: Free to user• Effort: Download an install,
initially requires chrome• Risk: Concerns about privacy,
browser crashing, biased search results, valuable use of time
Revised Customer Segment & Value Prop HypothesisBased on ~20 interviews, ~800 subject MVP tests, market & competitive research
Upwardly mobile young professionals making $2-10K of discretionary online purchases a year (excluding travel)
Discover online goods recommended by friends at the lowest possible price from trusted vendors
FB/TW posts from users you know
Company blog, FB, TW accounts
Affiliate program
SEO/SEM/SM
IE/FF/Chrome App Stores
FB/TW posts from cartpop users you know
DevelopersMarketers
Bloggers and Media targeting customer segment
Retail marketing partners
IE/FF/Chrome teams
Affiliate Program Providers
Affiliate program feesLicensingSubscription feesAd revenue
AWS InfrastructureSEMEng & Marketing OpEx
Next Week:
Experiment 1: Comparison Shopping Add-in for Chrome
http://wantio.com
Thank you
Significant value in online distribution for e-commerce