Comments on: How to create a profitable Freemium startup (spreadsheet model included!) http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/ Essays on viral marketing, freemium, and social gaming Sun, 07 Mar 2010 15:07:14 -0700 http://wordpress.org/?v=2.9.2 hourly 1 By: Bulgarian business directory http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-2/#comment-2621 Bulgarian business directory Tue, 02 Mar 2010 13:19:44 +0000 http://andrewchenblog.com/?p=657#comment-2621 Hello Oscar,<br>I see your company moto is "A Freemium company.." Does it mean you have a good experience in tailoring a freemium value preposition. I would be very thankful if you could answer few questions for me, nothing extraordinary. <br>Regards, Hello Oscar,
I see your company moto is “A Freemium company..” Does it mean you have a good experience in tailoring a freemium value preposition. I would be very thankful if you could answer few questions for me, nothing extraordinary.
Regards,

]]> By: Max Yankov http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-2/#comment-2620 Max Yankov Tue, 02 Mar 2010 08:02:54 +0000 http://andrewchenblog.com/?p=657#comment-2620 Would you kindly send your template to golergka@gmail.com? I'm not yet skilled enough to contribute to it, I think, but I will share it with producers at my company, Playnatic Ent. Would you kindly send your template to golergka@gmail.com? I'm not yet skilled enough to contribute to it, I think, but I will share it with producers at my company, Playnatic Ent.

]]> By: Oscar A Jofre http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-2/#comment-2619 Oscar A Jofre Mon, 01 Mar 2010 23:45:43 +0000 http://andrewchenblog.com/?p=657#comment-2619 Very interesting, I found this to be extremely useful. It is refreshing to see that people are taking the business model of FREEMIUM serious.<br><br>Thank you<br>Oscar A Jofre<br>Founder, BoardSuite Corp.<br>A Freemium company.. Very interesting, I found this to be extremely useful. It is refreshing to see that people are taking the business model of FREEMIUM serious.

Thank you
Oscar A Jofre
Founder, BoardSuite Corp.
A Freemium company..

]]> By: bsasik http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-2/#comment-2615 bsasik Sat, 20 Feb 2010 06:48:28 +0000 http://andrewchenblog.com/?p=657#comment-2615 Make Money to Generate Free Electricity!<br>The free electricity generator DIY guide is on sale today (check bottom of the page for price), and all the raw materials needed cost less than 100$. The materials needed are very common, and can be easily found at your local hardware store. Once you get our generator set-up and working, you can even start building these generators for your friends and family.<br><br>Our guide includes over 50 pages of detailed instructions which are very easy to follow, even if you're a complete novice. Furthermore, we offer 24/7 full technical support, thus, if you have any kind of problem or get stuck, you can contact us and and our friendly tech support team will respond quickly with details on how to resolve it.<br><br>We have even received an e-mail from a customer from Cabot, Arkansas, who has <b>started a local business</b>, making and selling our generators.<br><br>We do not mind you selling our technology, in fact, we encourage you do this, the more people spread the word, the better for our environment, and the more we're going to save on electric energy. Make Money to Generate Free Electricity!
The free electricity generator DIY guide is on sale today (check bottom of the page for price), and all the raw materials needed cost less than 100$. The materials needed are very common, and can be easily found at your local hardware store. Once you get our generator set-up and working, you can even start building these generators for your friends and family.

Our guide includes over 50 pages of detailed instructions which are very easy to follow, even if you're a complete novice. Furthermore, we offer 24/7 full technical support, thus, if you have any kind of problem or get stuck, you can contact us and and our friendly tech support team will respond quickly with details on how to resolve it.

We have even received an e-mail from a customer from Cabot, Arkansas, who has started a local business, making and selling our generators.

We do not mind you selling our technology, in fact, we encourage you do this, the more people spread the word, the better for our environment, and the more we're going to save on electric energy.

]]> By: Bulgarian business directory http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-2/#comment-2612 Bulgarian business directory Thu, 18 Feb 2010 15:47:19 +0000 http://andrewchenblog.com/?p=657#comment-2612 Hello Andrew,<br><br>Nice post and initiative! I have downloaded your template and worked on it for a few days. It has many assumptions and details not elaborated enough and even some flaws like common retention rate for paid and free users. I have separated your costs structure into fixed and communication costs; revised your funnel and retention to include separate retention rate for different users and free users that eventually decide to upgrade to paid after some time; have introduced also advertisement arbitrage, calculation of Business NPV and indebtedness to your cash flow statement and few more things. If you like, I can send you the new template so you could share it with everybody here. If anybody here is financially savvy and would like to contribute, it would be nice help to improve even further the model with few financial metrics.<br><br>Regards,<br><br>Stefan Hello Andrew,

Nice post and initiative! I have downloaded your template and worked on it for a few days. It has many assumptions and details not elaborated enough and even some flaws like common retention rate for paid and free users. I have separated your costs structure into fixed and communication costs; revised your funnel and retention to include separate retention rate for different users and free users that eventually decide to upgrade to paid after some time; have introduced also advertisement arbitrage, calculation of Business NPV and indebtedness to your cash flow statement and few more things. If you like, I can send you the new template so you could share it with everybody here. If anybody here is financially savvy and would like to contribute, it would be nice help to improve even further the model with few financial metrics.

Regards,

Stefan

]]> By: Yast.com http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-2/#comment-2600 Yast.com Mon, 01 Feb 2010 19:37:25 +0000 http://andrewchenblog.com/?p=657#comment-2600 Thanks for a good article. Will use your spreadsheet and have looked at it and entered data valid for our company. Interesting that even if the CPA is doubble the LTV, it is still a good deal taking viral effects into consideration.<br><br>Keep posting articles like this. And with spreadsheets :)<br><br>Minor correction though. In cell B53 under the "Retention" sheet. I think it should say: Total users, not paying users.<br><br>And may I suggest that you build into your model that you already have a certain number of beta-testers and how this comes into effect. Read somewhere that beta testers have a lower rate of convertion than the effects from marketing.<br><br>Thanks! Thanks for a good article. Will use your spreadsheet and have looked at it and entered data valid for our company. Interesting that even if the CPA is doubble the LTV, it is still a good deal taking viral effects into consideration.

Keep posting articles like this. And with spreadsheets :)

Minor correction though. In cell B53 under the “Retention” sheet. I think it should say: Total users, not paying users.

And may I suggest that you build into your model that you already have a certain number of beta-testers and how this comes into effect. Read somewhere that beta testers have a lower rate of convertion than the effects from marketing.

Thanks!

]]> By: Max Yankov http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-1/#comment-2572 Max Yankov Sat, 09 Jan 2010 17:49:46 +0000 http://andrewchenblog.com/?p=657#comment-2572 Great article. I used similar spreadsheets working on various f2p games. I also found that dividing users into groups very helping. Different user groups (hardcore paying gamers, casual gamers, socializers, etc; first I based it on the Bartle groups and then tweaked a little) have very different statistics (but small dispersion) and, more importantly, their metrics are affected by different aspects of the game itself. For example, improving PvP aspects of the game worked very well on players that were into that gameplay, but it didn't went so well for socializers. Great article. I used similar spreadsheets working on various f2p games. I also found that dividing users into groups very helping. Different user groups (hardcore paying gamers, casual gamers, socializers, etc; first I based it on the Bartle groups and then tweaked a little) have very different statistics (but small dispersion) and, more importantly, their metrics are affected by different aspects of the game itself. For example, improving PvP aspects of the game worked very well on players that were into that gameplay, but it didn't went so well for socializers.

]]> By: Emre Sokullu http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-1/#comment-2562 Emre Sokullu Tue, 05 Jan 2010 18:12:45 +0000 http://andrewchenblog.com/?p=657#comment-2562 Andrew - this is fascinating, very informative. Thank you very much for sharing. Andrew – this is fascinating, very informative. Thank you very much for sharing.

]]> By: brezina http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-1/#comment-2550 brezina Wed, 30 Dec 2009 17:27:48 +0000 http://andrewchenblog.com/?p=657#comment-2550 Yo Andrew - great post. Also, very funny timing - I just posted a blog post talking about Xobni's freemium business and the 4 metrics I measure for each customer. I also posted a screenshot of our funnel dashboard.<br><br>here is a link: <a href="http://www.mattbrezina.com/blog/2009/12/the-4-metrics-of-user-acquisition-and-the-customer-bull%25E2%2580%2599s-eye/" rel="nofollow">http://www.mattbrezina.com/blog/2009/12/the-4-m...</a> Yo Andrew – great post. Also, very funny timing – I just posted a blog post talking about Xobni's freemium business and the 4 metrics I measure for each customer. I also posted a screenshot of our funnel dashboard.

here is a link: http://www.mattbrezina.com/blog/2009/12/the-4-m...

]]> By: SharelOmer http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-1/#comment-2543 SharelOmer Sun, 27 Dec 2009 22:01:55 +0000 http://andrewchenblog.com/?p=657#comment-2543 Just read it again! love this post and the mention of @joshk tweet, so smart, funny and true. Just read it again! love this post and the mention of @joshk tweet, so smart, funny and true.

]]> By: KirkWard http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-1/#comment-2523 KirkWard Sat, 12 Dec 2009 02:33:42 +0000 http://andrewchenblog.com/?p=657#comment-2523 Andrew,<br><br>I like the article, and love the general usefulness of the spreadsheets.<br><br>But, I agree with Steve that a constant retention rate seems a bit off. I am thinking that most sites would have a decay model following a logarithmic formula, and looking at the model you used, the 20 time periods sort of implies a 20% monthly loss, which winds up giving you a less than 10% retention at the end of a year. Else you're analyzing over 20 years. All of which confuses me.<br><br>Do you have any suggestions for how to come up with a logarithmic formula to project customer loss from a known retention rate?<br><br>Kirk Andrew,

I like the article, and love the general usefulness of the spreadsheets.

But, I agree with Steve that a constant retention rate seems a bit off. I am thinking that most sites would have a decay model following a logarithmic formula, and looking at the model you used, the 20 time periods sort of implies a 20% monthly loss, which winds up giving you a less than 10% retention at the end of a year. Else you're analyzing over 20 years. All of which confuses me.

Do you have any suggestions for how to come up with a logarithmic formula to project customer loss from a known retention rate?

Kirk

]]> By: danielg86 http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-1/#comment-2260 danielg86 Wed, 28 Oct 2009 15:57:09 +0000 http://andrewchenblog.com/?p=657#comment-2260 This is an awesome article very insightful and very useful. I don't run a web-biz but I took from this article and aplied it to my parking lot cleaning business. here my website <a href="http://www.exosweep.com" rel="nofollow">www.exosweep.com</a>, contact me on the webform I'd like to hear how others applied this to their businesses. This is an awesome article very insightful and very useful. I don't run a web-biz but I took from this article and aplied it to my parking lot cleaning business. here my website http://www.exosweep.com, contact me on the webform I'd like to hear how others applied this to their businesses.

]]> By: Ryan Yan http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-1/#comment-2246 Ryan Yan Wed, 21 Oct 2009 00:53:52 +0000 http://andrewchenblog.com/?p=657#comment-2246 Good article! Good article!

]]> By: Jaison J. Raju http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-1/#comment-2242 Jaison J. Raju Mon, 12 Oct 2009 21:40:59 +0000 http://andrewchenblog.com/?p=657#comment-2242 wow... wow…

]]> By: Paul Thrasher http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-1/#comment-2235 Paul Thrasher Tue, 06 Oct 2009 01:37:32 +0000 http://andrewchenblog.com/?p=657#comment-2235 I love the freemium breakdown here. Brilliant analysis, Andrew. Thanks! I love the freemium breakdown here. Brilliant analysis, Andrew. Thanks!

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