Above the Crowd

Archive for the ‘advertising’ Category

Conversion: The Most Important Internet Metric of All (Revisited)

October 2, 2013:

Over 13 years ago, in March of 2000, I wrote a blog post titled “ The Most Powerful Internet Metric of All. ” The key thesis was this: if an Internet company could obsess about only one metric, it should be conversion. No other metric so holistically captures as many critical aspects of a web site – user design, usability, performance, convenience, ad effectiveness, net promoter score, customer satisfaction – all in a single measurement. Yet despite the remarkable power of this metric, it is alarming how few companies today truly understand conversion and how to optimize it. As such, it is time to pound the table ...

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The Dangerous Seduction of the Lifetime Value (LTV) Formula

September 4, 2012:

Many consumer Internet business executives are loyalists of the Lifetime Value model, often referred to as the LTV model or formula. Lifetime value is the net present value of the profit stream of a customer. This concept, which appears on the surface to be quite benign, is typically used to compare the costs of acquiring a customer (often referred to as SAC, which stands for Subscriber Acquisition Costs) with the discounted positive cash flows that will come from that customer over time. As long as the sum of the discounted future cash flows are significantly higher than the SAC, then ...

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Intuit to Acquire Demandforce for $424MM

April 27, 2012:

This morning, Intuit announced its agreement to acquire one of Benchmark’s portfolio companies, Demandforce, for $424mm. As with Instagram, Benchmark Capital is the largest institutional investor in Demandforce. Unlike Instagram, which is a consumer application and is extremely well known, Demandforce focuses on local professional businesses and has chosen to keep an intentionally low profile – a strategy that has served them well. Great entrepreneurs often blaze their own trails, and the founder and CEO of Demandforce, Rick Berry, is no different. In a day and age of social media, where many companies project a persona much larger than reality, Demandforce chose ...

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You Don’t Have to Tweet to Twitter

November 15, 2011:

Frequent comparisons to Facebook leave many confused about the true value of Twitter. [Follow Me on Twitter] “In a brand new direction A change of perception On a brand new trajection” – UB40 [Disclosure: Benchmark Capital is a major investor in Twitter, and my partner Peter Fenton sits on the Twitter BOD.] Twitter is having a remarkable year. Active users have soared to over 100 million per month, with daily actives now above 50 million. Tweets per day are over 250 million. Most top actors, athletes, and artists are all active on Twitter. Every news and sports program proudly advertises its Twitter account handle. No one would consider ...

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Understanding Why Netflix Changed Pricing

September 18, 2011:

Many journalists have offered their opinion on Netflix’s recent changes, its stock price decline, and their even more recent branding changes (Qwikster). Yet in each article, it appears as if the journalist all agree that the price move (creating separate prices for streaming and DVDs) was a bad strategic move. As an example,  Techcrunch notes : “Raising prices for those of us who opt for both streaming and DVDs would have been fine if Netflix had a deeper streaming catalog. But the gap is still too big, and the price hike seemed premature. Your customers are extremely loyal. Don’t piss them off.” The problem with this ...

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