Metrics To Manage By - Donald Rumsfeld Edition

Don Rumsfeld knows the importance of managing by the numbers, and they're doubly important when it comes to Internet companies/sites:

"In late October 2003, when I was in Baghdad watching the launch of the so-called Ramadan Offensive -- five simultaneous suicide bombings, beginning with one at the headquarters of the Red Cross, the fiery aftermath of which I witnessed -- then Secretary of Defense Rumsfeld was in Washington still denying that an insurgency was underway in Iraq. He was also drafting one of his famous "snowflakes," those late-night memoranda which he used to rain down on his terrorized Pentagon employees.

This particular snowflake, dated October 16, 2003 and entitled "Global War on Terrorism," reads almost poignantly now, as the Defense Secretary gropes to define the war that it has become his lot to fight: "Today we lack metrics to know if we are winning or losing the global war on terror," he wrote. "Are we capturing, killing or deterring and dissuading more terrorists every day than the madrassas and the radical clerics are recruiting, training and deploying against us?""
-Mark Danner

A good place to start in terms of web analytics are these two measures (in either case you can/should go more granular and get more creative, but at a high level, success boils down to these):

1. Inbound flow of new users (growth in, where they come from, etc.).

2. How active/how many times they return/how many actions taken (on average, in a specific cohort, over time, etc.)

Sometimes, and happily, the work that you do leads to improvements in both sets of numbers - often though, some work items generally bring in new users, and other items keep them sticking around. It's easy to make your business successful - you just have to do both. When allocating scarce resources, it often makes sense to focus on one side of things for a short while and then switch over and focus on the other for a short while (and repeat). That's it, a recipe for success. (Un)Fortunately, building a successful business on the Internet presents a more tractable problem than, say, getting involved in a land war in Asia ;)

Going To Mexico Soon . . .

It Must Be Friday News: TSA/Nipple Rings/Pliers

AP:"A Texas woman who said she was forced to remove a nipple ring with pliers in order to board an airplane called Thursday for an apology by federal security agents and a civil rights investigation."

We Got Bullets In Our Guns

Pusha's Response To Lil Wayne:

Money For Facebook Apps

A few datapoints from the Facebook App Exit Strategies panel at Snap Summit 2.0 - featuring Seth Goldstein, Jeremy Liew, Jeff Clavier, and Lee Lorenzen.

Seth Goldstein says that over the next ~24 months eCPMs for social networking pages (including apps) will go from ~$0.50 to ~$3 as big brand advertisers start getting - this will multiply the revenue numbers that FB Apps are pulling in - making for larger exits. Seth says that online advertising spend will grow 25% YoY in 2008 over 2007 - mostly by taking market share away from more traditional advertising.

Jeff Clavier says that FB app valuations are in the range of 2-3x revenues - in line with general technology valuations. I personally think that this is not so good for app developers because FB app monetization is at a pretty early/rudimentary stage. Remember that FB Platform launched only 9 months ago.

Jeremy Liew says that the largest FB app exit that he is aware of is single digit millions, about half cash, half stock.

Going To Snap Summit 2.0 In SF

I am going to be at Snap Summit 2.0 in San Francisco on Tuesday - I think it will be pretty insightful as far as events go. This is how they describe it:

"SNAP Summit 2.0 focuses on the business and design of social applications: how to attract users and keep them engaged, how to monetize and advertise, and what to watch out for in the future."

Basically, I am hoping to cast some light on what comes after 'All your web mail passwords are belong to us!' when it comes to social network power features. Wait, wait, brainstorm: it's virtual goods!


If you're there, definitely make a point to email/find me on Tuesday.

Priceless Hacker News Thread

Mike Arrington recently mentioned how news.ycombinator.com was one of his few 'look here first' sites to read every day (too lazy for link).

I've been reading it for a little while. Here is a priceless thread - if you're a little bit tired or something, I bet you'll laugh at loud a couple of times:

Ask: What would you do/make if you never had to monetize it?