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, 30 Oct 2011 02:46:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: David Cummins http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-2/#comment-2887 David Cummins Mon, 09 Aug 2010 09:37:21 +0000 http://andrewchenblog.com/?p=657#comment-2887 Great post. In the spreadsheet on the "Funnel" tab, isn't the "invite conversation rate %" a product of % of users that invite other people x % of those invitations that are accepts? This would get us to the viral k factor equation of: % of users inviting other users x average # of invites x % of invitations that are accepted. If that is correct, it might be worth dropping a little not in the b9 cell of the spreadsheet to let folks know. Thanks for the insight. Great post. In the spreadsheet on the “Funnel” tab, isn't the “invite conversation rate %” a product of % of users that invite other people x % of those invitations that are accepts? This would get us to the viral k factor equation of: % of users inviting other users x average # of invites x % of invitations that are accepted. If that is correct, it might be worth dropping a little not in the b9 cell of the spreadsheet to let folks know. Thanks for the insight.

]]> By: paris hilton http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-1/#comment-2886 paris hilton Mon, 09 Aug 2010 09:36:06 +0000 http://andrewchenblog.com/?p=657#comment-2886 Great post. In the spreadsheet on the "Funnel" tab, isn't the "invite conversation rate %" a product of % of users that invite other people x % of those invitations that are accepted? If this is the case, I believe this would get us to the viral k factor equation of: % of users inviting other users x average # of invites x % of invitations that are accepted. If that is correct, it might be worth dropping a little note in the b9 cell of the spreadsheet to let folks know. Thanks for the insight. Great post. In the spreadsheet on the “Funnel” tab, isn't the “invite conversation rate %” a product of % of users that invite other people x % of those invitations that are accepted? If this is the case, I believe this would get us to the viral k factor equation of: % of users inviting other users x average # of invites x % of invitations that are accepted. If that is correct, it might be worth dropping a little note in the b9 cell of the spreadsheet to let folks know. Thanks for the insight.

]]> By: zixmail pricing http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-1/#comment-2856 zixmail pricing Tue, 22 Jun 2010 12:05:34 +0000 http://andrewchenblog.com/?p=657#comment-2856 i think there are more good different tips which is more people! i think there are more good different tips which is more people!

]]> By: nabsy http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-1/#comment-2727 nabsy Mon, 07 Jun 2010 18:16:21 +0000 http://andrewchenblog.com/?p=657#comment-2727 Hi Andrew,<br><br>This is a fantastic post! Thank you for showing us how its done. I have one question about the model. In the cashflow tab if you look at the number of paying users in Time Period 3, there are 52 paying users which is MORE than the cumulative paying users for the same time period in the Funnel spreadsheet (28 paying users). Is there something wrong here or have I understood the retention tab incorrectly?<br><br>Nabil Hi Andrew,

This is a fantastic post! Thank you for showing us how its done. I have one question about the model. In the cashflow tab if you look at the number of paying users in Time Period 3, there are 52 paying users which is MORE than the cumulative paying users for the same time period in the Funnel spreadsheet (28 paying users). Is there something wrong here or have I understood the retention tab incorrectly?

Nabil

]]> By: nabsy http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-1/#comment-2698 nabsy Mon, 07 Jun 2010 11:16:21 +0000 http://andrewchenblog.com/?p=657#comment-2698 Hi Andrew,<br><br>This is a fantastic post! Thank you for showing us how its done. I have one question about the model. In the cashflow tab if you look at the number of paying users in Time Period 3, there are 52 paying users which is MORE than the cumulative paying users for the same time period in the Funnel spreadsheet (28 paying users). Is there something wrong here or have I understood the retention tab incorrectly?<br><br>Nabil Hi Andrew,

This is a fantastic post! Thank you for showing us how its done. I have one question about the model. In the cashflow tab if you look at the number of paying users in Time Period 3, there are 52 paying users which is MORE than the cumulative paying users for the same time period in the Funnel spreadsheet (28 paying users). Is there something wrong here or have I understood the retention tab incorrectly?

Nabil

]]> By: Max Marmer http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-1/#comment-2697 Max Marmer Sat, 05 Jun 2010 04:56:53 +0000 http://andrewchenblog.com/?p=657#comment-2697 Should a startup worry about the business model pre-product market fit? If so, what should they pay attention to and in what level of detail?<br><br>At pre-product market fit do they just need to approximate the size of the market, and all of these tactics are essentially about optimizing the slice of the pie they capture in the market? Should a startup worry about the business model pre-product market fit? If so, what should they pay attention to and in what level of detail?

At pre-product market fit do they just need to approximate the size of the market, and all of these tactics are essentially about optimizing the slice of the pie they capture in the market?

]]> By: grassroots http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-1/#comment-2695 grassroots Thu, 03 Jun 2010 14:19:21 +0000 http://andrewchenblog.com/?p=657#comment-2695 Excellent blog post on freemium. This is going to help me immensely with my new start-up. I was reading David Skok's blog post on sales complexity, <a href="http://www.forentrepreneurs.com/sales-complexity/" rel="nofollow">http://www.forentrepreneurs.com/sales-complexity/</a>, which got me thinking about a freemium model for my business. Your post has been bookmarked and I will be sure to revisit it in the future. Thanks for the detailed post and keep up the great content! Excellent blog post on freemium. This is going to help me immensely with my new start-up. I was reading David Skok's blog post on sales complexity, http://www.forentrepreneurs.com/sales-complexity/, which got me thinking about a freemium model for my business. Your post has been bookmarked and I will be sure to revisit it in the future. Thanks for the detailed post and keep up the great content!

]]> By: Bulgarian business directory http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/comment-page-1/#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-1/#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-1/#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-1/#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!
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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-1/#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-1/#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.

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