

Ask YC: How do you predict your "traffic/user growth"? - pclark

We've been asked to submit a slide deck and/or business plan to a few investor people -- we're a bit stumped on what numbers to base our web app traffic on?<p>Do we simply base them on our nearest competitor (we don't have any that are direct competitors, but lots that are vaguely competing) or do we simply base it on our user feedback surveys we ran before coding? (eg, 80% of n users said they wanted a service that ...)
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jacquesm
Run it for a couple of weeks, get some data and try to predict the life cycle
of an account based on your initial findings.

Other than that your only option is to use a crystal ball, I don't think it is
any use at all to try to do these predictions but I understand it is part of
the game. You'll only have the data you need now when you're operating for a
long enough time that you have seen several full account life cycles so that
you can refine your predictions.

Your nearest competitor isn't going to be much help to you because for one
they are established, and secondly they may do a much better / much worse job
at retaining their users.

Every web site will start off great at launch time because there is nobody
leaving (yet). Once you factor in churn you're in a much better position to
figure out how big something will be over time but for that you need your
actual data.

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Mystalic
For investors, you give three sets of predictions - The best-case scenario, a
standard scenario, and a lowball scenario, and show how you can make money
with ANY of those scenarios.

Usually, they shake their heads and say "They'll make money no matter what."

At least, that's been my experience.

I financial model my numbers based on all the possible inbound factors and
growth rates. Just build it in excel with the input factors and change them
based on logical assumptions.

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pclark
oh, I got a great idea from the Marc Andreessen interview:

Run google ads for a product that isn't there yet - if users click your
specific advert you know they're vaguely interested in it.

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patio11
I have heard this piece of advice several dozen times on another board and I
wonder if anyone has tried it in the last 3 years or so. It seems destined for
failure to me:

1) A new AdWords account starts with no history. To get preferable placement
you'll have to be significantly outbidding the people who already have
history. (i.e. I pay Google four cents a click for front page placement for, I
don't know, [how to make a bingo card]. If you started a new AdWords account
today Google would charge you a quarter.

2) There are automated quality checks which score sites these days and can
raise your minimum bid to stupidly high levels, which is essentially Google's
way of declining your business. If you put up a page for a product which
doesn't exist, you are highly likely to have these checks fire on you, since
they're specifically designed to bounce squeeze pages.

3) Getting a click on an AdWords ad doesn't prove the customer had interest,
it proves that you wrote the ad well. Conversely, not getting the click
doesn't prove there was no interest, it merely proves the ad was not
interesting. Do you have someone in your organization skilled at the art of
writing 3 line advertising copy? If not, what are you burning money for?

