And loving every goddamn minute.

Dave McClure, Master of 500 Hats

@ Univ. Edinburgh, Jan 2008

blog: blog: http://500hats.typepad.com/web: web: http://www.500hats.com/

slides: slides: http://slideshare.net/dmc500hats/

AgendaWeb 2.0 & Startup MetricsA Brief History of Social NetworksFacebook & Social Platforms

Why Be A Web 2.0 Entrepreneur?

10 Essential Elements of a Tasty Web 2.0 Meal

1. Steak: Web Services & APIs – Consume, Remix, Reuse, Emit2. Sizzle: Rich Client-Side Experience – Ajax, Flash, Air,

Silverlight3. SEO/SEM: Organic & Paid Search Traffic Opportunities4. Stuff: Blogs, Widgets, RSS, overall online content

distribution5. Send: I hate spam too, but email still works just fine 6. Social: People & Groups, Social Networks, Viral Loops7. Spicy: Tags, Ratings, [UG]Content= Lower Cost, Higher

Quality8. Stats: Ability to Measure the System & Get Feedback9. Speed: Ability to Iterate, Release Quickly, & Improve 10. Sell [out]: Lots of Ways to Make $ (Ads, Leads, E-Com, etc)

Startup Metrics for Pirates: Startup Metrics for Pirates: AARRR!AARRR!

Acquisition: users come to site from various channels

Activation: users enjoy 1st visit: "happy” experience

Retention: users come back, visit site multiple times

Referral: users like product enough to refer others

Revenue: users conduct some monetization behavior

Customer Lifecycle & Customer Lifecycle & Conversion Conversion BehaviorBehavior

Website.com

Example Example Conversion Conversion MetricsMetrics(note: (note: *not* actuals*not* actuals… your mileage may vary.) … your mileage may vary.)

Category Conversion Status Conv % Est. Value

Acquisition Visit Site

(or landing page, or external widget)100% $.01

Acquisition Doesn't Abandon

(views 2+ pages, stays 10+ sec, 2+ clicks)70% $.05

Activation Happy 1st Visit

(views X pages, stays Y sec, Z clicks)30% $.25

Activation Email/Blog/RSS/Widget Signup

(anything that could lead to repeat visit)5% $1

Activation Acct Signup

(includes profile data)2% $3

Retention Email Open / RSS view -> Clickthru 3% $2

Retention Repeat Visitor

(3+ visits in first 30 days)2% $5

Referral Refer 1+ users who visit site 2% $3

Referral Refer 1+ users who activate 1% $10

Revenue User generates minimum revenue 2% $5

Revenue User generates break-even revenue 1% $25

A Brief History of Social Networks

• Groups & Email Lists (eGroups/Yahoogroups)• Social Networks 1.0 (Ryze, Friendster, Orkut, Tribe)• Blogs (Blogger, Typepad, Wordpress)• Photos, Audio, Video (Flickr, Podcasts, YouTube)• Social Networks 2.0 (LinkedIn, MySpace, Facebook)• Feeds & Shared Social Activity (News Feed, Twitter) • Apps & Widgets (Slide, RockYou, ClearSpring)• Hosted Platforms (Facebook, OpenSocial, Bebo)• Vertical Communities (Ning, KickApps) • Embedded Apps & Social APIs (Facebook, recently)

• Social Network Prediction Markets (the future?)

Facebook, Open Social, & The Social Platform Revolution• The Social Graph = Friend Lists• Shared Social Activity Stream = Feeds• Social Platform & APIs = Apps

• Will it Continue to Grow? (Yes)• Will Others Compete? (Probably)• Will it Monetize Better? (Dunno… hope so)