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Understanding the key variables in Viral Marketing

Understanding the key variables in Viral Marketing
A short study of this web site reveals that a hugely important factor for success in startup companies is finding ways to acquire customers at a low cost. In the Business Models section, we looked at the perfect business model: Viral customer acquisition with good monetization. However viral growth turns out to be an elusive goal, and only a very small number of companies actually achieve true viral growth. In 2005, I invested in a company called Tabblo (acquired by HP in 2007), and had the good fortune to work with an outstanding entrepreneur, Antonio Rodriguez. Tabblo did manage to achieve good viral growth, but around the same time YouTube was launched and managed to achieve explosive viral growth. To give you a preview of this post, what you will learn is that there are two key parameters that drive how viral growth happens, the Viral Coefficient, and the Viral Cycle Time. What we want to understand in these two models, is how the population of Customers changes over time. Related:  GrowingWork

Let's just add in a little virality It happens all the time. I’m meeting with an entrepreneur, who is telling me about a really innovative product idea for a consumer website. And I’m liking it. We’re going back and forth on product ideas. And before I know it, we’re approaching the end of our meeting. I then ask them, “So, how are you going to acquire customers.” The most disappointing answer is when they say “Oh, we’ll just make it viral.” Virality is something that has to be engineered from the beginning…and it’s harder to create virality than it is to create a good product. That’s why First Round Capital’s website has always said: “Too many companies treat marketing and sales as a tactical afterthought. Customer acquisition (also called distribution) is the number one challenge facing consumer web properties.

Never Take Your Eyes Off This Hacker Metric If you’re like me, you’ve had enough of the Facebook IPO story. For tech entrepreneurs struggling to build stuff, the cacophony of recent press is just more noise. That’s why when my friend Andrew Chen posted an insightful analysis of Facebook user data, I was happy to get back to learning from what the company did right instead of debating what its bankers did wrong. Chen calculated Facebook’s historical ratio of daily active users (DAU) to monthly active users (MAU) and the stats are startling. Since March 2009, when the earliest data is available, approximately 50% of Facebook users logged in daily. As other technology companies struggle to maintain DAU to MAU ratios of 5% or less, Facebook’s numbers appear stratospherically high in comparison. It’s as if Zuckerberg has steered the company by this golden ratio. As I’ve written previously, I believe a mastery of the mechanics of habit design is increasingly deciding startup winners and losers. More is More One Way to Grow

Top Twitter Analytics Tools With hundreds of add-on tools, Twitter certainly has plenty of ways you can analyze its data. I set out to find the best tools that I would recommend for you to track and compare your own Tweets, as well as examine the growth of followers and when you actually send out your 140-character missives. My two faves are TweetStats and Twittercounter. There are other tools that involve "sentiment analysis," being able to examine what people are Tweeting about or the attitude they are expressing in their tweets. Some of these tools are dirt simple: you enter the Twitter ID or IDs of the appropriate people and wait for them to create their reports. You might also want to review an article that I wrote last month about 17 alternatives to Klout for other services that go beyond Twitter, or that attempt to measure some kind of reach or influence in social media. The following tools are listed in the order of most to least useful, at least to my point of view. Twittercounter.

Keep Your Startup from Failing with this Guide "It's fine to celebrate success but it is more important to heed the lessons of failure." - Bill Gates Failure is a large part of starting a business. In fact, about 90% of all startups fail. However, as innovative tech luminaries extol the virtues of failure as a means to success, more and more aspiring founders take these words as gospel, celebrating startup snafus as instances of silicon-fueled bravado while neglecting to take the time to learn from mistakes and miscalculations that could have been easily avoided with a modicum of foresight. And that is why we’ve compiled an in-depth guide that explores the ways in which entrepreneurs can learn from failure, specifically other startups that failed. Why You Should Learn from Failing Instead of Just Failing Starting a tech company comes with its share of risks, and therefore, the chances of failure are considerably high. How to Find Failed Startups in Your Industry Reaching Out to Failed Companies and What to Learn from Them Final Thoughts

Agostini v. Felton - Religious Freedom Page R.A. and other teenagers allegedly made and burned a cross on the lawn of the black family that lived across the street. R.A. was charged with disorderly conduct under the St. Paul Bias Motivated Crime Ordinance, which prohibits the displaying of symbols, objects, graffiti, etc. that one "knows or has reasonable grounds to know arouses anger, alarm or resentment in other on the basis or race, color, creed, religion, or gender." The Minnesota Supreme Court ruled that the statute was not too broad and unallowably content based, and thereby not a violation of the First Amendment because the statute was limited to "fighting words" which are not constitutionally protected anyway. The Court, with no Justices dissenting, ruled that the statute is unconstitutional, as it is a clear violation of the First Amendment. The Court must adhere to the construction of the Minnesota Court, and we accept their ruling that the statute only pertains to "fighting words."

Facebook viral marketing: When and why do apps “jump the shark?” Excel spreadsheet download For those of you who are interested in the gory details, please download the following spreadsheet here: Viral and Retention Excel Model (Click to download) Math warning! This blog post will be a little more technical than usual, so I apologize to those of you who are bored by this. See this image before? That’s what happens when you “jump the shark” and your app goes from successful to completely not successful. Modeling user acquisition First off, let’s look at some ways to model user acquisition. Invite conversion rate % = 10%Average invites per person = 8.00Initial user base = 10,000Carrying capacity = 100,000 (note that these are just example numbers) To understand how these constants work, you basically want to think about how viral marketing works. That means that in the first time period, you have 10k. u(t) = u(0) * (1 + i * conv)^t where u(0) = 10k, i = 8.00, conv = 10%, and t is the # of time periods You may want to read that before going further… Ouch.

Vanity Metrics vs. Actionable Metrics – Guest Post by Eric Ries Vanity metrics: good for feeling awesome, bad for action. (photo source: UK Guardian) This is a guest post by serial entrepreneur Eric Ries. He was most recently co-founder and CTO of IMVU, which has more than 20 million registered users and generates $1,000,000+ in revenue per month. Eric is also a venture advisor to Kleiner Perkins. How do you get to $1,000,000 per month in sales? Here is just one business-changing example, taken from the outstanding “How IMVU Learned its way to $10M a year” on Venture Hacks… IMVU learned its way to product/market fit. Enter Eric Ries… Vanity Metrics vs. The only metrics that entrepreneurs should invest energy in collecting are those that help them make decisions. When you hear companies doing PR about the billions of messages sent using their product, or the total GDP of their economy, think vanity metrics. Now consider the case of an Actionable Metric. For example, here’s a pattern I’ve witnessed in companies large and small. 1. 2. 3. 4. 1. 2. 3.

The Best Free Tools for Twitter Analytics What are the best free tools for analyzing a Twitter profile? During a social media audit I like to run a company’s Twitter profiles through some basic analysis tools to set benchmarks and compare them to competitors. I got good response to my post on Facebook analytics tools so I thought I’d do something similar for Twitter. But this time I’m going to highlight free tools that anyone can use. I’m focusing specifically on profile analysis as opposed to Twitter tools for other purposes. Twitter tools frequently come and go, especially the free ones, so a list like this is always evolving. Twitter Web Analytics Twitter has created its own free analytics tool, however it is still in beta and not yet available to everyone: The data is fairly basic; the publishers we work with that already have access have not found it particularly useful yet. Topsy Social Analytics Topsy’s Social Analytics tool offers a good way to trend and compare mentions and replies for up to three profiles: Twitter Counter

Misused mobile UX patterns Misused mobile UX patterns If you are an experienced designer, you probably agree that being inspired by others is not stealing in UI design. It’s best practice research. Some might say that sticking to the guidelines and following others will kill creativity and, at the end of the day, all apps will look the same. 1. At least half million posts have been written about the hamburger menu, mostly by designers, arguing against it. This solution is pretty tempting and convenient for a designer: you don’t have to worry about the limited screen estate, just squeeze your whole navigation into a scrollable overlay that is hidden by default. Experiments show, however, that exposing menu options in a more visible way increases engagement, user satisfaction and even revenue. If your navigation is complex, hiding it does not make it mobile friendly. 2. Due to the limited screen estate, it also seems a no brainer to save space by replacing text labels with icons wherever possible. 3. 4. 5. The Six Simple Principles of Viral Marketing Editor’s Note: Dr. Wilson first published this article in 2000. He then updated it in 2005. I admit it. But you have to admire the virus. In a few short generations, a virus population can explode. Viral Marketing Defined What does a virus have to do with marketing? Off the Internet, viral marketing has been referred to as “word-of-mouth,” “creating a buzz,” “leveraging the media,” “network marketing.” The Classic Hotmail Example The classic example of viral marketing is, one of the first free web-based email services. Give away free email addresses and services;Attach a simple tag at the bottom of every free message sent out: “Get your private, free email at stand back while people email to their own network of friends and associates;Who see the message;Sign up for their own free email service; and thenPropel the message still wider to their own ever-increasing circles of friends and associates. Elements of a Viral Marketing Strategy 1. 2. 3. 4. 5.