PlayerSearch Blog

by Ted Kasten, Founder of PlayerSearch

Ning provides Data Point for “Freemium” Pricing Model

3% of Nings customers actually pay for premium services…

This is a good data point for all start-ups (including mine) that are contemplating the “Freemium” pricing model.  This pricing model is certainly the most popular on the web and allows a company to get a large customer base of free users to monetize with ads along with some subscription revenue from the power users.  I have heard some entrepreneurs state they plan to get 10-20% of their user base to pay for the premium features…but that is probably not going to happen.  Obviously this percentage depends on a lot of factors such as pricing, features, market and others, but I think the 3%  figure that Ning is reporting seems to be the ballpark for the premium component of the Freemium pricing model.

500,000 networks is a big number…what is even more impressive is the fact that 65% of them are active.

October 7, 2008 Posted by | Mental Notes | | Leave a comment

Virtuous Circles

This should be one of the goals of every Internet business model. Every new member that joins Ning brings in two additional users compounded daily. The compounded daily part is the key that makes their customer growth virtuous and exponential. On average, every user that joins today brings in two new users tomorrow…those two new users bring in four new users the next day and so on. After 10 days, that one new user has brought in 1,024 new users. The graph above is a depiction of the growth in customers from a single new user.

We are working on some virtuous aspects for PlayerSearch and the Draft Analyzer which, if done right, will be a key component of their success.  MySpace and Facebook are great examples of the power of virtuous circles (Geocities had similar features as these sites but didn’t have the social networking aspect that creates the virtuous circles and therefore is no longer around).

April 30, 2008 Posted by | Uncategorized | | Leave a comment