Startuplet financial model, updated userbase model

October 24, 2008 – 15:06

Thanks to DenisM pointing out that the userbase model I’ve presented in the last post constantly underestimates your userbase.

Glad that someone read that deep :)

Basically the models counts only for users that came only during current month and considers churn rate to be a 100%.

This is easily fixable by addiing an extra parameter “churn rate” and accumulating the users:

Updated spreadsheet

The model shows that with the same startuplet as in the previous example and churn rate of 30% we actually can get a positive 12-month NPV with just weekly blog posts each reaching slightly more than 3’300 readers.

Previous posts on this topic:

  • Denis

    Well, your business looks a whole lot better now! You have to blog half as much, reach one third as many people to remain on the same schedule to +ve NPV. And you still come out way ahead at month 23.

    If anything this model tells that customer loyalty super important – lower churn yeilds drastically better result.

    One useful iteration on this model I plan to make for myself is to count all users for virality, but only new users for revenue. This model is applicable when you sell something rather than rely on AdSense.

  • Andrey Khavryuchenko

    @Denis

    Yes, that would be interesting case. Please, share it when ready.

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