the goose

1. Find out what they want:  @replies
2. Go and get it: Some of last week went into building credit card processing into Ag Tweet
3. Give it to them: 4 paying subscribers – whoop.

Ag Tweet did something last week that 99% of web applications fail to do.  It garnered some paying customers.  Four of them in fact, eaching shelling out €3 a month.  I’m writing up a brief explanation of how it was put together and why I made various choices including pricing models. Read the rest of this entry »

I’ve been plugging away at the old Español for a couple of months now.  It is not so hard as languages go but there is still a certain amount of pointing going on while ordering dinner in a restaurant.  One of the big differences between English and Spanish are reflexive verbs.  For example, the Spanish don’t say “I like icecream”, they say “Icecream likes me”.

Me gusta helado.

Not everything is reflexive.  Only certain verbs and you just have to learn which are and which are not.   There is a list of reflexive verbs but I think one is missing.

To be worth

I’ve been playing around with different pricing points for AgTweet this week and the problem is that although we’re used to reading the price of stuff on labels, pricing is reflexive and so is value.  Its impossible for anything to be worth €10.  It can only be worth €10 to somebody. There is a broad range of people who use agtweet from students to IT geeks and the trick will be in coming up with price points for each.  In setting a price all I am hoping to do is guess the price that will be good value to enough people to make the service fly.  Its a bit of a cath-22 situation.  Price too high and too few sign up.  Price to low and you end up sponsoring the whole thing.  Decisions, decisions.

Getting whatever you want really isn’t that hard.  You just gotta stay focused while everyone else has gets bored and moves onto to something else.  Its true for property development, software development and getting good at pretty much anything.  Malcom Gladwell reckons that all it takes to become truly world class at something is to spend 10,000 hours practicing it.  Of course bugger all people can hold their attention on something for 10,000 hours.  Even swimwear models lose their appear after 10 minutes or so.

Recently I’ve been a little more distracted than normal – so in an effort to become a little more focused I started a new project.  You got it.  Don’t worry though – this one was a quickie.  I set up http://twitter.com/dailyfocus.  Its a twitter bot that simply asks “how much revenue did you add today?” at about 16:30 Irish time every day.

Its just a little reminder for myself that really all I gotta do is stay focused on day to day revenue and the rest will follow.  You can follow it too and join me and 4 other Eastern Eurpean girls looking for love.  Of course, its kind of like admitting you aren’t focused.  Then again, unless your a concert pianist, you probably are.

The only problem with having control over your own time is – no one tells you when you are spending too much time on a task.  Anyway.  This is done now.  A good while ago at the first Bizcamp in Dublin, I took part in a little game that involved putting together a pitch for a fake business in under 10 minutes.  I can’t remember what is was called.  Anyway, some bright spark came up with the idea of a collaborative subscription model planning tool.  I really liked it and I’ve spent the last day or two putting a lite version to further the discussion on what to do with Ag Tweet.

You can check out the (mostly javascript) tool at http://www.jameskennedy.ie/plannr.

So what does it do?  It aims to help you discuss price points for your subscription service.  It assumes there are 3 ‘levels’ of subscription and you can play with the figures ( prices, % of people on each plan, total number of subscribers etc).

When you are ready to you can add a comment at the bottom and email it off.  None of the data is saved on my server and all the information is held in the URL.

I’ve pre-populated the table with figures which look kind of like what I’m thinking of for AgTweet.  If you have any ideas on what pricing structure I should put in place for it, by all means fill out the sheet and let send it on to me.

I saw this table in David McWilliams’, The Pope’s Children, a few years ago.  It made me sick.  There nestled in the middle of the ‘potential to generate their own income’ column was me, an IT worker.  It looks slightly dated now though.

So what has changed?

Restricted capital: Builders need capital to work with but web businesses typically don’t need a lot of financial capital to get started.

Focus on costs: It is a great time to buy that house in Dalkey but not a great time to be building one.  There is a downward pressure on prices.  Software innovation is often about pushing costs down – a popular proposition right now.

With that in mind I’m proposing a change to the table that will take place in the coming years.  Lets hope it catches on.

While listening to the Global Business BBC podcast a couple of weeks ago, I heard the author of What They Teach You in Harvard Business School.  He said something that struck a cord with me.

“Comparison is the death of happiness”

I think he’s right and I put together this poll to demonstrate why.

1. Find out what people want: Replies on their mobile
2. Go and get it: TBD
3. Give it to them: TBD

It looks like I’ve found out what people want from Agtweet.  I sent out a survey a couple of days ago and I got a surprising 112 replies.  I was surprised, not only because 112 was getting on for 20% of agtweets followers, but also because of the content.  First up – perhaps not suprisingly given that Meteor customers make up almost half of AgTweets subscribers despite only a quarter of them having an ‘085′ number. 

About 80% wanted to be able to have @replies sent to their phone by text.  This is something twitter themselves are no longer offering.  The reason?  Well, sending text messages in Europe costs money.  Footing the bill for the millions of replies that are sent every day would be unsustainable.  Hence, maybe there is an opportunity here.  About 20% of respondants want to be able to receive replies and would be willing to pay ‘a small fee’ for the privilege.  I used the term small fee in the survey rather than a specific amount, because what a small if is, is pretty subjective.  Among the Meteor customers, this figure actually rose to 30% willing to pay something for the privilege of replies.

So here we are.  20% don’t need replies, 80% want them but only a third of those are willing to pay.  I asked a final question which was ‘how could agtweet pay for itself?’  My favourite answer was “GET A JOB”.  They obviously haven’t read my blog (or my last jobs performance appraisal for that matter).  People took a lot of time in their answers.  There was no shining moment of revelation reading through these but there were some good ideas.  In brief they were:

1. Get sponsorship (operator, government)
2. Charge a 10c fee per message sent
3. Allow people to buy bundles of text
4. Pay a small monthly subscription

Sponsorship is something I already looked into via approaching advertising agencies and it takes a bit of lobbying.  It also doesn’t really fit with my get hundreds of people paying tens of euro a month objective.

I do like the idea of charging a small fee per text received but the premium rate messaging regime in Ireland doesn’t really allow it.  The smallest premium rate fee available is 30c of which you can expect to get about 8c in revenue inclusive of VAT.  I did look at trying to make this work but it didn’t really stack up.

Buying bundles of texts is the approach taken by http://www.twitsms.co.uk.  They’re rates are pretty low with 4c a message.  It is run by an Australian couple who are makinga play on a worldwide basis.  I know from experience that making a margin on a text message is not an easy game.  Scaling issues abound along with customer support issues.

Finally, the ’small monthly’ subscription came up as a suggestion.  I like this best because it fits with building up a predictable cash flow.  The only trick would be geting the price point right.

While all of this surveying was going on, I’ve had 12 people trialling the reply service.  This has produced some useful usage information.

The graph to the right shows how many replies each of the testers have been receiving.  The figures are taken after 11 days of the trial.

I’m not sure if 12 people is a large enough sample but something about this graph jumped out at me.  About 30% of the users were getting a lot more usage than the other 70% – which somewhat aligns with the willingness to pay in the survey I ran.

In summary:

20% don’t want @replies at all on their phone

80% do – but only 30% of them would be willing to pay.  So – the question I have to ask here is – is it gonna be worthwhile trying to charge anyone at all?  What would be considered a ’small fee’?  Ideally I’d like to come up with a solution that kept everyone happy.  In other words, a free or small fee for replies for the light users and a slightly higher fee for the heavy users.

I got an email last week from my invoice supplier, Blinksale.  In a cleverly worded email they let me know that their free service was no longer available.  No real problem, I’m already a paying customer.  A quick trip to the website reveals that they have in fact been sold.

This is the second free website I’ve come across in the last couple of weeks that has been sold and the had the free plan removed.  Twollow did the same thing some time last month.  I’ve no doubt that Blinksale was making money but a > 1% conversion rate from free to paid accounts was always going to hurt.  The aquirer was obviously planning to recoup some of their investment by removing the free option for a boost to sales.

It seems that the steady march towards paying for stuff is online is underway.

I’ve been happily playing a lot of backgammon to while away the evenings here at Piehole HQ.  It was all going pretty well, mostly because P had never played before and was ‘easy meat’.  It didn’t last however.  She soon figured out something that I hadn’t.

As your players more around the board in a game of backgamon, they become more and more valuable.  It takes effort to get pieces all the way around the board, therefore the ones that are almost there have a lot more ‘energy’ stored up in them.

Why?

The closer a piece is to your home board, the less energy (or throws) it takes to get them ‘home’.  Self evident you might think.  It takes at least 3 ‘throws’ to get a piece from the opponent’s board to mine while it takes less ‘throws’, the closer the piece is to home.

So what has this to do with my sales funnel?

Prospects that have signed up to the email newsletter are less valuable than prospects that have picked up the phone and called.  Prospects that have called us are less valuable than those than have bought.  Those that have bought are less valuable than those that have upgraded. Customers that have upgraded are less valuable than those that recommend your services and refer customers.

Now consider how you spend your marketing budget (or dice throws if I really need to keep up with the analogy).  Why would I spend the same amount of money and/or effort marketing to ‘leads’ as I would ‘referers’.  Referrers are more valuable and yet, at the moment anyway, we don’t really do much to thank them for their loyalty.  They are on the same email list as all the others, they get the same promotions but we don’t really do anything special to look after them.  This seems wrong.  These guys are worth more therefore we should think about spending more on marketing to them.  For example, maybe we can provide them with better discounts or upgrades.

I saw this tweet from @kevin_noonan this morning and it hit a nerve.

So how would this apply to building ‘lifestyle design’ (if anyone has a better description for this, I’m wide open to suggestions).

The Rules of the Game: In my case, this is that I want to have hundreds of people paying me tens of euro a month until I earn more than I spend without selling my time.  Other games you can play include, earn 4x the national minimum wage and invest 20% of income for 15 years until financially free or find a job you love and do it until you die. The good news is that there are new games you can play all the time – or even come up with your own.

Set the Stakes: To me this means, what am I willing to spend in terms of capital. I don’t necessarily mean financial capital.  This could mean the amount of time I’m willing to invest or the amount of effort I’m happy to spend.

Quitting time: How do you know its working?  For me this is all about measuring progress.  Setting a clear, well set goal and breaking it down to weekly or monthly objectives.

Carry on.