The Kawasaki Chronicles – Part Deux

Twitter discussion between Guy Kawasaki and myself:

guykawasaki: @graphedge How am I supposed to get beyond this point? I am told to sign up again in a closed loop. http://twitpic.com/sw3mk

waldronfaulkner: @guykawasaki Hi, I’m the founder of GraphEdge. You found a bug that only effects users with >120K fol’s. More on blog: http://bit.ly/74YWiT

GuyKawasaki: @WaldronFaulkner just read blog. Not many companies tell big users we don’t matter much 😉

WaldronFaulkner: @GuyKawasaki Of course it isn’t that you don’t matter (!) it’s that I’d need to charge you too high price. It’s you, or 100’s of others.

I’ve done the math. Here’s some metrics exposure.

  • My average conversion is for $8.35 (40% buy a year’s worth of access for $17.88, 60% buy 1 month for $1.99). [Note: this pricing structure is no longer in effect, it’s a little higher at the moment]
  • Assuming no re-ups for the 1-monthers, my current pricing model yields an average lifespan of 5.4 months, at a monthly rate of about $1.55.
  • My average converted users has 1,672 followers. (The application scales on followers, albeit not completely linearly)
  • This means I earn about a penny per month for every 10 followers my users have.
  • GuyKawasaki has nearly 200K followers.
  • To support Guy’s account at the same efficiency as my average user, I’d need to charge him about $185 per month.

I’d be very happy to provide Guy with GraphEdge service for a price in this range, but it’s not the self-serve model we’ve built-out and are experimenting with. And while an individual like Guy Kawasaki is savvy enough to understand the value of his Twitter network, that may be more than he’s willing to pay and these are probably higher-touch sales than I’m currently geared to sell.

Now… one might well point out that the value of having a high-profile user like Guy Kawasaki is worth any number of marketing dollars. Very true. A favorable tweet from Guy would likely generate something on the order of 50-200 new accounts. But acquisition isn’t my problem right now. In fact, as I’ve mentioned recently, I’m thinking of closing down my free trial.

However, as I begin to think about funding for the next phase of development of GraphEdge, there will definitely be a spreadsheet to model a business catering to a smaller number of higher-revenue partners like Guy.

And Guy, email me (waldron [at] graphedge [dot] com) if you’re really interested in using GraphEdge!

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