

Ask HN: You're in beta. How much $ is 1,000 random users worth? - DanLivesHere

Imagine that you have your product and it's at the point where you're ready to get some real users in -- maybe to test, maybe as actual customers or whatnot. The opportunity arises to get about 1,000 of them, give or take, to sign up, all within a 24-48 hour period, with two caveats:<p>1) You'd have to give them some incentive, like give one of them a free iPad or something.<p>2) You don't know much about the audience you'd get other than that they all have basic English literacy.<p>On top of the incentive, what would you be willing to spend to get those 1,000 people?
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itsprofitbaron
Correct me if I am wrong but I am going to assume a few things:

\- A service offers 1000 users for $X

\- The service pays users $Y to join site with the potential to win an
iPad/other offer as well as $Y.

If that is the case, _the value of users is negative to the startup._

Here's why:

\- Users are incentivised to join site, to win iPad thats it.

\- They are won't pay to join a service (if its a paid service)

They are not incentivised to join and actually use the product, which are
incentivised by acquiring them via Word of Mouth, SEO and other forms of
advertising channels. Thus the LTV of the customer is $0 - they won't use the
site, they'll just signup as _it becomes more profitable for them to join 100
sites and do nothing than it is to join 1 and do something._

Similarly, the service itself is incentivised to actually cheat the startup as
they will then get $X and a free iPad or something. They could easily do this
by using a bot to join the services.

Even if the service won't do that, there will be users on the service who are
actually prepared to do that as well using multiple payment emails etc - if
they are paid for joining too!

Essentially _by paying for this service, the startup has wasted money_ by
paying for 1000 users who are going to do nothing on their service and have
given a free iPad (or other prize).

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zendo
My guess - not much. There are a lot of factors that go into how much a group
of users is worth. Do they add a lot of value to your product? I would pay a
_lot_ for Woz, Bill Gates, Obama and The Pope to be active users of my
product, because their membership would raise recognition of my brand. But
just four random people? Worth a lot less. Four random people who are signing
up and will forget about my service the next day? Even less than that.

An IPad costs about $500. If you gave one away for every 1000 people, you'd be
paying $2 per person to try out your product. Assuming that your product is
somewhat niche, you might have a signup rate of 1% (random guess) from a pool
of the general population. This would make your cost per user $200.

It would probably be a better idea to imagine who your users will be and
target this subgroup specifically. As an analogy, if I'm selling calcium pills
to everyone I see on the street, I probably won't sell to many - no matter how
good they are. But if I go find people who are afraid of osteoporosis, I will
probably be able to sell to many of them.

I would suggest that you stop thinking in terms of absolute numbers of random
people (especially if they're not paying) and think more about the value that
they can bring to you (whether it is word of mouth marketing, content
creation, advice, money or something else). For many products, random people
are not the best choice for an initial user base.

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rprospero
There's two services here that need to be separated. Doing this as customer
acquisition seems to be what most of the commenters here are focused on and
does seem like a poor deal.

On the other hand, 1000 software testers for the price of an iPad are just a
couple of quarters each. Plus, here's where their unreliability becomes an
advantage. Bob's drunk uncle might be a lousy customer, but the aspects that
make him a terrible customer make him a great QA agent. He'll forget his
password and create fifty new accounts, then demand that they be merged. He'll
post comments in EBCDIC. He'll declare he lives in the state of Oregon in the
nation of Uganda. He's never heard of Paypal.

After launch, he's a support nightmare and you'll be happy that he disappears
the instant that the service is no longer free. However, during the beta, a
thousand drunk uncles will find all the edge cases that you never even thought
to unit test. They'll force you to tighten down your UI to the simplest
possible level of readability. They'll stress test your support
infrastructure. And they'll do it for half a buck.

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mootothemax
Close to nothing, honestly. If the only reason the users are signing up is to
win a free iPad (especially with the odds being only 1 in 1,000) I severely
doubt that _any_ of them would convert to paid customers.

Now, if you could send 1,000 paid customers my way in that time, I'd be
extremely happy to offer you 65% of the initial revenue generated.

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tzaman
I'd offer them some kind of premium features and/or discounts later down the
product (time)line.

~~~
DanLivesHere
Sorry, I revised the question -- I'm basically asking, what you'd pay on top
of the premium. To boil it down, I want to know what you are willing to pay to
acquire a random user.

~~~
oniworks
Sorry, wouldn't pay a dime. This is a little akin to buying 1000 twitter
followers. Sure they'll give you apparent social proof, but you'll have a hard
time selling to them. What you are really asking is how much is an unqualified
lead worth. You can buy random traffic all day, but if none of them
purchase/upgrade its worthless to you.

You have to ask yourself if you really think that you can convert any of these
users. There is a world of difference between targeted and untargeted traffic.
You probably wouldn't even get any usable metrics out of the deal.

You are also talking about an investment of 2 bucks per user, and you could
almost do better with a basic cpc campaign. You'd end up spending a bit more,
but you be much more targeted.

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helen842000
If you would get value from people signing up, just testing your services
you'd probably be better taking the money you would use to buy the ipad and
posting on Mechanical Turk.

You'd then get a good number of people to sign up to use your service, they
could even do a screencast of their interactions, how they navigate your
services and common places where users get stuck.

Asking and paying for direct feedback will be far more useful than buying
users with no interaction requirements and hoping for some meaning to arise
from your stats.

Least after the testing is done you can purge your system of the testing
accounts and then you know who your genuine users are.

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AznHisoka
"maybe to test, maybe as actual customers"

There's a huge difference between the 2. You do know you can talk to some
mommy bloggers and hold a giveaway, and give 1 iPad in exchange for a few
hundred users...

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debacle
A random user who is coming to my site to win something who is probably not
even in my demographic. And you want me to pay for this?

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damoncali
Literally nothing, or less. Sounds like a worthless headache.

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PythonDeveloper
I'd offer a commission to the producer of the traffic, based on conversion
after beta. Anyone can generate traffic, and even signups to a free beta.

Getting users that are qualified AND interested that will convert to paid
accounts is very difficult, and if whomever is referring users isn't gaming
the system, they should have faith that their referrals will convert to paid
accounts.

