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About Stuart G. Hall

Making a positive difference one day at a time. #London #Leicester

Question on marketing / growth strategy for my sports app

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Question on marketing / growth strategy for my sports app (http://www.850sportsapp.com). I’m about to take on investment so let’s say I had £30k to spend on growth but have a target of 30k installs, what would you do? Would you optimise CPC ads to try and get a £1 CPA (installs) or would you go for something less measureable, more risky but with the potential to hit that number with that money? If so which channels would you try?

When it’s 10 to nine and you just want to know what happened in the sports before you get into the office, 8:50 will give you a summary of everything you need written by sports journalists within a simple, beautiful app.
850SPORTSAPP.COM

Three key marketing takeaways to ensure positive revenue

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Three Key Takeaways

  1. To have efficient marketing, you need to know where your customers come from and which channels bring the most valuable customers. KISSmetrics has an automatically tracked property called Channel. It categorizes people into seven different channels based on their referrer.
  2. In the KISSmetrics funnel and revenue reports, you can segment people by any property, not just channel. Using KISSmetrics’s channel segmentation, you can get an understanding of where your customers come from. Since KISSmetrics connects every touchpoint to your customer, you can get the very first touchpoint and the very first channel that brought someone to you. You’ll be able to see how the channels at the very top of your funnel perform.
  3. When you know who is sending you visitors and customers, you’ll know where to target your time and money. You’ll also see which channels don’t work. Simply put, channel segmentation allows you to make better marketing decisions.

With thanks to KISSmetrics blog post on ‘Using Channels in KISSmetrics to Learn Where Your Most Valuable Customers Come From’.

Simple metrics count

 

The power of storytelling

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With the film ‘American Sniper’ about to premiere in the UK about a US military sniper here’s my short story on the subject, to illustrate the power of storytelling.

A short story. I met a couple outside a pub in London a few years ago, and by chance we got talking, and they told me about a good friend of their’s who had recently been working as a U.S. sniper.

Now their friend now no longer in the military, but they were worried about him, in particular he had been using a new expensive laptop in full view of people outside this very pub the day before, in a place where it was very easy for any passer-by to just grab it, and run off with the laptop. His friends said to me they didn’t understand how he could be so ‘careless’ and were at a loss what to do.

It seemed like they wanted me to say something; remembering something I replied that in my opinion their friend’s training and experience on the battle field as a sniper meant he had learned to shut himself off completely from any fear, and this mental state had clearly persisted into civilian life. This in my opinion explained why their friend had no worries using his laptop in such a cavalier way in public. They seemed to like my answer. 

The key difference between traditional software and software as a service: Growth hurts (but only at first)

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In the traditional software world, companies like Oracle and SAP do most of their business by selling a “perpetual” license to their software and then later selling upgrades. In this model, customers pay for the software license up front and then typically pay a recurring annual maintenance fee (about 15-20% of the original license fee). Those of us who came from this world would call this transaction a “cashectomy”: The customer asks how much the software costs and the salesperson then asks the customer how much budget they have; miraculously, the cost equals the budget and, voilà, the cashectomy operation is complete.

This is great for old-line software companies and it’s great for traditional income statement accounting. Why? Because the timing of revenue and expenses are perfectly aligned. All of the license fee costs go directly to the revenue line and all of the associated costs get reflected as well, so a $1M license fee sold in the quarter shows up as $1M in revenue in the quarter. That’s how traditional software companies can get to profitability on the income statement early on in their lifecycles.

Now compare that to what happens with SaaS. Instead of purchasing a perpetual license to the software, the customer is signing up to use the software on an ongoing basis, via a service-based model — hence the term “software as a service”. Even though a customer typically signs a contract for 12-24 months, the company does not get to recognize those 12-24 months of fees as revenue up front. Rather, the accounting rules require that the company recognize revenue as the software service is delivered (so for a 12-month contract, revenue is recognized each month at 1/12 of the total contract value).

Yet the company incurred almost all its costs to be able to acquire that customer in the first place — sales and marketing, developing and maintaining the software, hosting infrastructure — up front. Many of these up-front expenses don’t get recognized over time in the income statement and therein lies the rub: The timing of revenue and expenses are misaligned.

The income statement alone therefore can no longer tell us everything we need to know about valuing a SaaS business.

Even more significantly (since cash is the lifeblood of any business), the cash flow timing is also misaligned: The customer often only pays for the service one month or year at a time — but the software business has to pay its full expenses immediately.

Thus, as with many innovative new businesses, cash flow is a lagging not a leadingindicator of the business’s financial health.

Take a look at the cumulative cash flow for a single customer under a SaaS model — the company doesn’t even break even on that customer until after a year:

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And as the company starts to acquire more customers, the cash flow becomes even more negative. However, the faster the company acquires customers, the larger it grows its installed base and the better the curve looks when it becomes cash flow positive:

Cash flow becomes even more negative before getting significantly better.

For the full post please read: Understanding SaaS: Why the Pundits Have It Wrong | Andreessen Horowitz.

George Clooney petition – sign here!

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If you want to support George Clooney’s petition to support Sony against the hackers who stopped The Interview movie release then sign here on my blog, simply by leaving your comment. Thanks.

On November 24 of this year, Sony Pictures was notified that it was the victim of a cyber attack, the effects of which is the most chilling and devastating of any cyber attack in the history of our country. Personal information including Social Security numbers, email addresses, home addresses, phone numbers and the full texts of emails of tens of thousands of Sony employees was leaked online in an effort to scare and terrorize these workers.

The hackers have made both demands and threats. The demand that Sony halt the release of its upcoming comedy The Interview, a satirical film about North Korean dictator Kim Jong Un. Their threats vary from personal—you better behave wisely—to threatening physical harm—not only you but your family is in danger. North Korea has not claimed credit for the attack but has praised the act, calling it a righteous deed and promising merciless measures if the film is released.

Meanwhile the hackers insist in their statement that what they’ve done so far is only a small part of our further plan. This is not just an attack on Sony. It involves every studio, every network, every business and every individual in this country. That is why we fully support Sony’s decision not to submit to these hackers’ demands.

We know that to give in to these criminals now will open the door for any group that would threaten freedom of expression, privacy and personal liberty.

We hope these hackers are brought to justice but until they are, we will not stand in fear. We will stand together.

Ladies from Taguatinga show their support for Kaka

The girls from Taguatinga have got your back George!

Here’s what you’re missing

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Yesterday’s visitor stats for the blog show a nice spread of my posts, from top ranking piece on CBA vs ROI, to the advantages of the Tesla Roadster (with a few Bond references thrown in for good measure).

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Yesterday

Natural variation sounds a lot less boring than it really is

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Sorry about the title. What I wanted to say was this. A boiler engineer from British Gas came round yesterday after we’d lost power for the second time in two weeks. so help fix it. He got to work, got out his laptop to do a diagnostic, and did a good job. The engineer, Kirk, at the end of his work said he could also fix the cause of why the boiler heating wasn’t working, blocked hydraulic pipes which other BG engineers said were unfixable, which thus made me smile. He explained that he had a lot of experience of the boiler model we had from his work in Islington and Bethnal Green where many were the same Valliant model as ours. But that it was funny all you had to do was go to the next borough and there were a different set of boilers. Funny, I thought later in the pub talking to Shirley, because he’d just reminded me of a powerful teaching from the ‘University of Life’, that not all boilers are the same, and not all boiler engineers are the same.

What’s great is that this principle applies to so many different things in life. Just when you get thinking all cab drivers are unhappy dudes, you’ll meet a cheery one with a great sense of humour. Just when you have given up testing a growth hacking hypothesis to death and are about to give up, you’ll get a result which suggests another positive direction. Natural variation is out there, take advantage of it!

How to hit a target with a ball without actually throwing it!

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See the scene from 28 Days when baseball star Eddie gives Gwen (Sandra Bullock, Hollywood’s best paid actress in 2014) a lesson on how to hit the target – focus on getting yourself ready – rather than just trying to hit the target. It’s the key to success. As I couldn’t find a movie clip with the spoken lines, here’s the script from the scene between Eddie and Gwen:

What are you doing?
Great. Another thing l suck at.
Well, hold on. Gwen, hey.
Please.
Come here a second.
-What?
-What were you thinking about?
When you threw the ball,
what were you thinking about?
l don’t know. The mating habits
of African ants. l don’t know.
The striped thing.
You were thinking about
hitting the mattress.
Well, you know, it might sound funny
to you, but that’s all wrong.
When you lock in on the strike zone…
…it’s looking about
the size of a peanut.
And you think, ”Damn. l gotta get
that little ball in there?”
You’ve psyched yourself
right out of the game.
The strike zone, the call…
…the count, the batter,
forget all that.
You gotta think about the little
things. The things you can control.
You can control your stance,
your balance…
…your release, your follow-through.
Think about those little things
and only those little things….
You know? l mean….
Because when you let go of the ball…
…it’s over.
You don’t have a say in what happens.
That’s somebody else’s job.
-l want you to try this.
-l don’t want to.
l’m just curious.
-l don’t want to do it.
-l just want to see how you hold it.
Don’t grab it, don’t grab it.
Look at it, look at it.
Hold it like an egg.
Loose. Easy. All right?
Let me get a look at it
from over there.
Let me get a look at it
from over there.
All right.
l want you to throw it over here
nice and easy.
Point at me with your left hand.
Throw it where you’re pointing at.
Better. But you nutted the batter…
…and the other team’s beating
the crap out of you.
Try again. Heads up.
l want you to do it again.
This time, shut your eyes.
-What?
-Just shut your eyes.
-So weird.
-Fire away.
Right there.
That is a strike in any country.