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The Art & Science of Bootstrapping

Nico Perez
Nico Perez

General Assembly London presentation, outlining the top tips and lessons from our experience building Mixcloud

1 of 69
THE ART & SCIENCE OF BOOTSTRAPPING Nico Perez Co-founder, Mixcloud
AGENDA 2 PART 1: GETTING STARTED PART 2: THINKING ABOUT BUSINESS MODELS 1. Bootstrapping Mixcloud 8. Revenue 2. Your founding team EXERCISE INTERLUDE 3. User and market research 9. Costs 4. Your 鍖rst office 10. Pro鍖ts 5. The (minimum viable) product 6. Know when to outsource 7. (Alternative) Funding EXERCISE INTERLUDE
THE ART & SCIENCE OF BOOTSTRAPPING 3 INTERACTIVE
INTRODUCTION 4 NICO PEREZ CO-FOUNDER, MIXCLOUD Mentor at The Founder Institute Young Advisor to EU Vice President on Digital Agenda Masters in Engineering from Cambridge RSA Fellow
INTRODUCTION 5 NICO PEREZ CO-FOUNDER, MIXCLOUD DJing for +10 years Radio presenter at University Music and radio fan
6 WHY?
BOOTSTRAPPING MIXCLOUD 7 THE THIRD WAY
THE ART & SCIENCE OF BOOTSTRAPPING 8 1. BOOTSTRAPPING MIXCLOUD
what is Mixcloud? platform for DJs & radio presenters = expert, curated content
THE ART & SCIENCE OF BOOTSTRAPPING 10 2. YOUR FOUNDING TEAM
YOUR FOUNDING TEAM 11 START SMALL + SKILLSWAP
YOUR FOUNDING TEAM 12 HIRE SLOW
THE ART & SCIENCE OF BOOTSTRAPPING 13 3. USER AND MARKET RESEARCH
USER AND MARKET RESEARCH 14 RESEARCH = MARKETING ONLINE TOOLS REAL WORLD
USER AND MARKET RESEARCH 15 RESEARCH = MARKETING ONLINE TOOLS REAL WORLD
THE ART & SCIENCE OF BOOTSTRAPPING 16 4. YOUR FIRST OFFICE
The Art & Science of Bootstrapping
18
The Art & Science of Bootstrapping
THE ART & SCIENCE OF BOOTSTRAPPING 20 5. THE MINIMUM VIABLE PRODUCT
THE MINIMUM VIABLE PRODUCT 21 Launch early Fail fast Validate assumptions Analyse - GA, A/B, multivariate
THE MINIMUM VIABLE PRODUCT 22 if youre not embarrassed when you ship your 鍖rst version you waited too long - Mat Mullenweg, founder of Wordpress
THE ART & SCIENCE OF BOOTSTRAPPING 23 6. KNOW WHEN TO OUTSOURCE
KNOW WHEN TO OUTSOURCE 24 outsource the content creation outsource the editorial outsource the community management outsource the ad sales
THE ART & SCIENCE OF BOOTSTRAPPING 25 7. (ALTERNATIVE) FUNDING
FUNDING 26
THE ART & SCIENCE OF BOOTSTRAPPING 27 EXERCISE INTERLUDE
EXERCISE INTERLUDE 28 Basic P&L Cash balance Revenue - Cost of sales = Gross pro鍖t - Overheads = Net pro鍖t
The simple model Revenue Direct costs = Gross profit Ads Servers Freemium Licenses Services Customer acquisition E-commerce Gross Profit Overheads = EBITDA Salaries Rent
EXERCISE bit.ly/npbootstrappltemplate 30 Basic P&L model calculation Unique visitors = Start at 10000, grows 20% per month. On average 5 page views per unique visitor Revenue = Ad based. 贈7 CPM (per 1000 impressions). But doesnt kick in till after 12 months on project Cost of sales = Server costs increase by 贈10 for every 1000 unique visitors Overheads = Salaries = 0 until breakeven (ignore rent etc) Questions: 1. How long till breakeven? 2. How much do you need in the bank? 3. Assuming all net pro鍖t divided equally, how long till 3 founders on 贈24k/year salaries
EXERCISE INTERLUDE 31 bit.ly/npbootstrapplanswer
LESSON 32 COMPOUND INTEREST IS YOUR FRIEND
THE ART & SCIENCE OF BOOTSTRAPPING 33 PART 2 BUSINESS MODELS
PART 2: BUSINESS MODELS Revenue - Models - Checking assumptions - Tips from Mixcloud - Challenges - Mix/single streams - Ad space models - Transactional models Costs - Customer acquisition - Conversion funnels - Social + partnerships - People costs Profits
THE ART & SCIENCE OF BOOTSTRAPPING 35 8. BUSINESS MODEL REVENUE
Revenue Models A tool for forecasting Built on (realistic?) assumptions Verifications help
Tip: Check your assumptions Market data Will it work? What has worked historically? Building in sensitivity +/- %
Mixcloud assumptions Traditional radio ad spend moving online (Google, Spotify, TargetSpot) Ads: Display vs Audio vs Sponsorship Freemium (Premium Accounts Subscription) E-commerce (Affiliate sales)
Content challenges What type of content are consumers willing to pay for and how? How do brands 鍖t into the picture? You dont need all the answers
Think about: Revenue Stream Mix Multiple streams or concentrate on one? B2C vs B2B? Who pays (asymmetric vs symmetric)? Mixcloud: Ads + freemium plan
Mixcloud Example: The Online Radio/Music Space Consumer pays PIRACY! Specialist Mass market Mixcloud Someone else pays
Ad-funded content: Challenges and ideas Fragmentation of media -> blog / audio ad networks? UGC vs Professional Paid search (ROI) vs display. Brand awareness? Self serve advertising for rich media?
THE ART & SCIENCE OF BOOTSTRAPPING 43 EXERCISE INTERLUDE
EXERCISE 44 How many revenue sources and example sites can you come up with in the following categories: Advertising Commerce Subscription Peer to Peer Transaction Processing Licensing Data Mobile Gaming
Revenue model ideas Advertising Commerce Subscription Display Ads - ex. Yahoo! Retailing - ex. Zappos Software as a Service (SAAS) - ex. Salesforce Search Ads - ex. Google Marketplace - ex. Etsy Service as a Service - ex. Shopify Text Ads - ex. Google Crowdsourced Marketplace - ex. Threadless Content as a Service - ex: Spotify, Net鍖ix Video Ads - ex. Hulu Excess Capacity Markets - Uber, AirBnB Infrastructure/Platform As A Service - ex. AWS Audio Ads - ex. Pandora Vertically Integrated Commerce - ex. Warby Parker Freemium SAAS - ex. Dropbox Promoted Content - ex. Twitter, Tumblr Aggregator - ex. Lastminute.com Donations - ex. Wikipedia Paid content links - ex. Outbrain Flash Sales: Gilt Groupe, Vente Privee Sampling - ex Birchbox Recruitment Ads - ex. LinkedIn Group buying - ex. Groupon Membership Services - ex Amazon Prime Lead Generation - ex. MoneySuperMarket, ZocDoc Digital goods / downloads - ex. iTunes Support and Maintenance - ex 10gen, Red Hat A鍖liate Fees - ex. Amazon A鍖liate Program Virtual goods - ex. Zynga Paywall - ex. NYTimes Classi鍖eds - ex. Craiglist Training - ex. Cloudera (??), -> Coursera Voice and video-conferencing - ex. Uberconference Featured listings - e.g. Yelp, Super Pages; Pay what you want - ex. Radiohead Email Ads - as done by Yahoo, MSN Commission - ex. SharesPost Peer to Peer Ad Retargeting - ex. Criteo Commission per order - ex. Seamless, GrubHub Peer-to-Peer Lending - ex. Lending Club, Real-time Intent Ad Delivery Auction - ex. eBay Peer-to-Peer Gambling - ex. BetFair Location-based o鍖ers - ex/ Foursquare Reverse Auction - ex Priceline Peer-to-peer buying - ex Etsy Sponsorships / Site Takeovers - ex. Pandora Barter for services ex. SwapRight Peer-to-peer insurance/home/car - ex (??) Peer-to-peer computing (CrasPlan storage, or SETI@home) Peer-to-peer service - ex. Mechanical Turk, TaskRabbit Peer-to-peer Mobile WiFi/Tethering - ex (??)
And many more bit.ly/npbootstrapmodels Transaction processing Data Merchant Acquiring - ex. PayPal (Online / O鍖ine), Stripe (Online), Square (O鍖ine) User data - ex. BlueKai Intermediary - ex. IP Commerce (POS 2.0), CardSpring Business data - ex. Duedil Acquiring Processing - ex. Paymentech User intelligence - ex. Yougov Bank Transfer - ex. Dwolla Search Data - ex. Chango Bank Depository O鍖ering - ex. Simple, Movenbank (spread on average deposits) Real-time Consumer Intent Data - ex. Yieldbot Bank Card Issuance - ex. Simple (interchange fee per transaction) Benchmarking services - ex. Comscore Full鍖lment - ex. Amazon Market research - ex. GLG Messaging - ex. Peer-to-Peer SMS, IM, Group Messaging Telephony - ex. termination/origination in public telephony networks (skype out/in) Mobile Telephony - ex. termination/origination within private telephony cloud (e.g. native skype) Paid App Downloads - ex. WhatsApp Payment Gateways: Mobile -ex. Braintree In-app purchases - ex. Zynga Poker Platform Monetization ("Tax") - Facebook Credits; iO6 30% cut. In-app subscriptions - ex. NY Times app Advertising - ex. Flurry, AdMob Licensing Digital-to-physical - ex. Red Stamp, Postagram Per Seat License - ex. Sencha Per Device/Server License - ex. QlikView Gaming Per Application instance - ex. Adobe Photoshop Freemium - Free to play w/ virtual currency - ex. Zynga Per Site License - ex. Private cloud on internal infrastructure Subscription- ex. World of Warcraft Patent Licensing - ex. Qualcomm Premium - ex. xBox games Brand Licensing - ex. Sesame Street DLC - (Downloadable Content) - ex. Call of Duty Indirect Licensing - ex. Apple Volume Purchasing Ad Supported - ex - addictinggames.com
But 4 main categories 1. Ad funded 2. Freemium 3. Services/Licensing 4. E-commerce
Freemium/Transactional Models We believe the future business model for social games will be primarily transactions consumers play for free supported by advertising but have the option to pay for virtual items and premium features Kristian @ Play鍖sh, July 2008
Freemium Model Learnings and Tips Distribution platforms Dont force them to pay Access not ownership Gaming as a service, not product Virtual goods have a value thats very tangible maximised around social emotion and social expression - Sebastian, COO Quality control on ads
THE ART & SCIENCE OF BOOTSTRAPPING 50 9. BUSINESS MODEL COSTS
What you can control Revenue Direct costs = Gross profit Ads Servers Freemium Licenses Services Customer acquisition E-commerce Gross Profit Overheads = EBITDA Salaries Rent
What you can control Revenue Direct costs = Gross profit Ads Servers Freemium Licenses Services Customer acquisition Gross Profit Overheads = EBITDA Salaries Rent
Customer acquisition costs: SEO Affiliates Advertising / PPC PR Viral
Make it more Social Destination -> Distribution Sharing what you love (via Facebook, Twitter, blogs, etc) Mixcloud helps tell friends what you are listening to 25
Conversion funnel + Viral loop (see also Dave McClure on metrics bit.ly/npbootstrapmetrics) ! ! ! ! ! ! ! ! Visitor ! ! ! ! Registered user 18% Integrate with FB + Twitter <20% Invite friends 10%
Social lessons & tips from Mixcloud Do you have a social object? Convert users -> marketers Build features and processes to help them do this Reduce cost per acquisition
Mixcloud <3 partnerships
The Art & Science of Bootstrapping
Biggest cost = Biggest Asset Headcount -> burn rate Equity/Debt financing vs self funding Short term revenue vs long term potential
THE ART & SCIENCE OF BOOTSTRAPPING 60 9. BUSINESS MODEL PROFITS
Profits Offset past losses against profits (get good accountant) Re-invest to help scale Reward contributors -> Fred Wilson equity blog post: bit.ly/npbootstrapequity
What we covered Revenue - Models - Checking assumptions - Tips from Mixcloud - Challenges - Mix/single streams - Ad space models - Transactional models Costs - Customer acquisition - Conversion funnels - Social + partnerships - People costs Profits
5 Questions to think about - What type of model(s)? - Trust assumptions? - Who pays? - Social object? - How long till breakeven?
In business: If it doesnt make dollars it doesnt make sense But passion/love drives Bootstrappers
LAST THOUGHT 65 QUESTION
The Art & Science of Bootstrapping
nico@mixcloud.com @nicoperez
THE ART & SCIENCE OF BOOTSTRAPPING 68 Q&A
PHOTO CREDITS 69 http://www.鍖ickr.com/photos/T/1540007749/ http://www.鍖ickr.com/photos/thomashawk/228228018/ http://www.鍖ickr.com/photos/8078381@N03/3279725831/ http://www.鍖ickr.com/photos/9948354@N08/763399258/ http://www.鍖ickr.com/photos/emry/369409914 http://www.鍖ickr.com/photos/rietje/3719904189

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The Art & Science of Bootstrapping

  • 1. THE ART & SCIENCE OF BOOTSTRAPPING Nico Perez Co-founder, Mixcloud
  • 2. AGENDA 2 PART 1: GETTING STARTED PART 2: THINKING ABOUT BUSINESS MODELS 1. Bootstrapping Mixcloud 8. Revenue 2. Your founding team EXERCISE INTERLUDE 3. User and market research 9. Costs 4. Your 鍖rst office 10. Pro鍖ts 5. The (minimum viable) product 6. Know when to outsource 7. (Alternative) Funding EXERCISE INTERLUDE
  • 3. THE ART & SCIENCE OF BOOTSTRAPPING 3 INTERACTIVE
  • 4. INTRODUCTION 4 NICO PEREZ CO-FOUNDER, MIXCLOUD Mentor at The Founder Institute Young Advisor to EU Vice President on Digital Agenda Masters in Engineering from Cambridge RSA Fellow
  • 5. INTRODUCTION 5 NICO PEREZ CO-FOUNDER, MIXCLOUD DJing for +10 years Radio presenter at University Music and radio fan
  • 7. BOOTSTRAPPING MIXCLOUD 7 THE THIRD WAY
  • 8. THE ART & SCIENCE OF BOOTSTRAPPING 8 1. BOOTSTRAPPING MIXCLOUD
  • 9. what is Mixcloud? platform for DJs & radio presenters = expert, curated content
  • 10. THE ART & SCIENCE OF BOOTSTRAPPING 10 2. YOUR FOUNDING TEAM
  • 11. YOUR FOUNDING TEAM 11 START SMALL + SKILLSWAP
  • 12. YOUR FOUNDING TEAM 12 HIRE SLOW
  • 13. THE ART & SCIENCE OF BOOTSTRAPPING 13 3. USER AND MARKET RESEARCH
  • 14. USER AND MARKET RESEARCH 14 RESEARCH = MARKETING ONLINE TOOLS REAL WORLD
  • 15. USER AND MARKET RESEARCH 15 RESEARCH = MARKETING ONLINE TOOLS REAL WORLD
  • 16. THE ART & SCIENCE OF BOOTSTRAPPING 16 4. YOUR FIRST OFFICE
  • 18. 18
  • 20. THE ART & SCIENCE OF BOOTSTRAPPING 20 5. THE MINIMUM VIABLE PRODUCT
  • 21. THE MINIMUM VIABLE PRODUCT 21 Launch early Fail fast Validate assumptions Analyse - GA, A/B, multivariate
  • 22. THE MINIMUM VIABLE PRODUCT 22 if youre not embarrassed when you ship your 鍖rst version you waited too long - Mat Mullenweg, founder of Wordpress
  • 23. THE ART & SCIENCE OF BOOTSTRAPPING 23 6. KNOW WHEN TO OUTSOURCE
  • 24. KNOW WHEN TO OUTSOURCE 24 outsource the content creation outsource the editorial outsource the community management outsource the ad sales
  • 25. THE ART & SCIENCE OF BOOTSTRAPPING 25 7. (ALTERNATIVE) FUNDING
  • 26. FUNDING 26
  • 27. THE ART & SCIENCE OF BOOTSTRAPPING 27 EXERCISE INTERLUDE
  • 28. EXERCISE INTERLUDE 28 Basic P&L Cash balance Revenue - Cost of sales = Gross pro鍖t - Overheads = Net pro鍖t
  • 29. The simple model Revenue Direct costs = Gross profit Ads Servers Freemium Licenses Services Customer acquisition E-commerce Gross Profit Overheads = EBITDA Salaries Rent
  • 30. EXERCISE bit.ly/npbootstrappltemplate 30 Basic P&L model calculation Unique visitors = Start at 10000, grows 20% per month. On average 5 page views per unique visitor Revenue = Ad based. 贈7 CPM (per 1000 impressions). But doesnt kick in till after 12 months on project Cost of sales = Server costs increase by 贈10 for every 1000 unique visitors Overheads = Salaries = 0 until breakeven (ignore rent etc) Questions: 1. How long till breakeven? 2. How much do you need in the bank? 3. Assuming all net pro鍖t divided equally, how long till 3 founders on 贈24k/year salaries
  • 31. EXERCISE INTERLUDE 31 bit.ly/npbootstrapplanswer
  • 32. LESSON 32 COMPOUND INTEREST IS YOUR FRIEND
  • 33. THE ART & SCIENCE OF BOOTSTRAPPING 33 PART 2 BUSINESS MODELS
  • 34. PART 2: BUSINESS MODELS Revenue - Models - Checking assumptions - Tips from Mixcloud - Challenges - Mix/single streams - Ad space models - Transactional models Costs - Customer acquisition - Conversion funnels - Social + partnerships - People costs Profits
  • 35. THE ART & SCIENCE OF BOOTSTRAPPING 35 8. BUSINESS MODEL REVENUE
  • 36. Revenue Models A tool for forecasting Built on (realistic?) assumptions Verifications help
  • 37. Tip: Check your assumptions Market data Will it work? What has worked historically? Building in sensitivity +/- %
  • 38. Mixcloud assumptions Traditional radio ad spend moving online (Google, Spotify, TargetSpot) Ads: Display vs Audio vs Sponsorship Freemium (Premium Accounts Subscription) E-commerce (Affiliate sales)
  • 39. Content challenges What type of content are consumers willing to pay for and how? How do brands 鍖t into the picture? You dont need all the answers
  • 40. Think about: Revenue Stream Mix Multiple streams or concentrate on one? B2C vs B2B? Who pays (asymmetric vs symmetric)? Mixcloud: Ads + freemium plan
  • 41. Mixcloud Example: The Online Radio/Music Space Consumer pays PIRACY! Specialist Mass market Mixcloud Someone else pays
  • 42. Ad-funded content: Challenges and ideas Fragmentation of media -> blog / audio ad networks? UGC vs Professional Paid search (ROI) vs display. Brand awareness? Self serve advertising for rich media?
  • 43. THE ART & SCIENCE OF BOOTSTRAPPING 43 EXERCISE INTERLUDE
  • 44. EXERCISE 44 How many revenue sources and example sites can you come up with in the following categories: Advertising Commerce Subscription Peer to Peer Transaction Processing Licensing Data Mobile Gaming
  • 45. Revenue model ideas Advertising Commerce Subscription Display Ads - ex. Yahoo! Retailing - ex. Zappos Software as a Service (SAAS) - ex. Salesforce Search Ads - ex. Google Marketplace - ex. Etsy Service as a Service - ex. Shopify Text Ads - ex. Google Crowdsourced Marketplace - ex. Threadless Content as a Service - ex: Spotify, Net鍖ix Video Ads - ex. Hulu Excess Capacity Markets - Uber, AirBnB Infrastructure/Platform As A Service - ex. AWS Audio Ads - ex. Pandora Vertically Integrated Commerce - ex. Warby Parker Freemium SAAS - ex. Dropbox Promoted Content - ex. Twitter, Tumblr Aggregator - ex. Lastminute.com Donations - ex. Wikipedia Paid content links - ex. Outbrain Flash Sales: Gilt Groupe, Vente Privee Sampling - ex Birchbox Recruitment Ads - ex. LinkedIn Group buying - ex. Groupon Membership Services - ex Amazon Prime Lead Generation - ex. MoneySuperMarket, ZocDoc Digital goods / downloads - ex. iTunes Support and Maintenance - ex 10gen, Red Hat A鍖liate Fees - ex. Amazon A鍖liate Program Virtual goods - ex. Zynga Paywall - ex. NYTimes Classi鍖eds - ex. Craiglist Training - ex. Cloudera (??), -> Coursera Voice and video-conferencing - ex. Uberconference Featured listings - e.g. Yelp, Super Pages; Pay what you want - ex. Radiohead Email Ads - as done by Yahoo, MSN Commission - ex. SharesPost Peer to Peer Ad Retargeting - ex. Criteo Commission per order - ex. Seamless, GrubHub Peer-to-Peer Lending - ex. Lending Club, Real-time Intent Ad Delivery Auction - ex. eBay Peer-to-Peer Gambling - ex. BetFair Location-based o鍖ers - ex/ Foursquare Reverse Auction - ex Priceline Peer-to-peer buying - ex Etsy Sponsorships / Site Takeovers - ex. Pandora Barter for services ex. SwapRight Peer-to-peer insurance/home/car - ex (??) Peer-to-peer computing (CrasPlan storage, or SETI@home) Peer-to-peer service - ex. Mechanical Turk, TaskRabbit Peer-to-peer Mobile WiFi/Tethering - ex (??)
  • 46. And many more bit.ly/npbootstrapmodels Transaction processing Data Merchant Acquiring - ex. PayPal (Online / O鍖ine), Stripe (Online), Square (O鍖ine) User data - ex. BlueKai Intermediary - ex. IP Commerce (POS 2.0), CardSpring Business data - ex. Duedil Acquiring Processing - ex. Paymentech User intelligence - ex. Yougov Bank Transfer - ex. Dwolla Search Data - ex. Chango Bank Depository O鍖ering - ex. Simple, Movenbank (spread on average deposits) Real-time Consumer Intent Data - ex. Yieldbot Bank Card Issuance - ex. Simple (interchange fee per transaction) Benchmarking services - ex. Comscore Full鍖lment - ex. Amazon Market research - ex. GLG Messaging - ex. Peer-to-Peer SMS, IM, Group Messaging Telephony - ex. termination/origination in public telephony networks (skype out/in) Mobile Telephony - ex. termination/origination within private telephony cloud (e.g. native skype) Paid App Downloads - ex. WhatsApp Payment Gateways: Mobile -ex. Braintree In-app purchases - ex. Zynga Poker Platform Monetization ("Tax") - Facebook Credits; iO6 30% cut. In-app subscriptions - ex. NY Times app Advertising - ex. Flurry, AdMob Licensing Digital-to-physical - ex. Red Stamp, Postagram Per Seat License - ex. Sencha Per Device/Server License - ex. QlikView Gaming Per Application instance - ex. Adobe Photoshop Freemium - Free to play w/ virtual currency - ex. Zynga Per Site License - ex. Private cloud on internal infrastructure Subscription- ex. World of Warcraft Patent Licensing - ex. Qualcomm Premium - ex. xBox games Brand Licensing - ex. Sesame Street DLC - (Downloadable Content) - ex. Call of Duty Indirect Licensing - ex. Apple Volume Purchasing Ad Supported - ex - addictinggames.com
  • 47. But 4 main categories 1. Ad funded 2. Freemium 3. Services/Licensing 4. E-commerce
  • 48. Freemium/Transactional Models We believe the future business model for social games will be primarily transactions consumers play for free supported by advertising but have the option to pay for virtual items and premium features Kristian @ Play鍖sh, July 2008
  • 49. Freemium Model Learnings and Tips Distribution platforms Dont force them to pay Access not ownership Gaming as a service, not product Virtual goods have a value thats very tangible maximised around social emotion and social expression - Sebastian, COO Quality control on ads
  • 50. THE ART & SCIENCE OF BOOTSTRAPPING 50 9. BUSINESS MODEL COSTS
  • 51. What you can control Revenue Direct costs = Gross profit Ads Servers Freemium Licenses Services Customer acquisition E-commerce Gross Profit Overheads = EBITDA Salaries Rent
  • 52. What you can control Revenue Direct costs = Gross profit Ads Servers Freemium Licenses Services Customer acquisition Gross Profit Overheads = EBITDA Salaries Rent
  • 53. Customer acquisition costs: SEO Affiliates Advertising / PPC PR Viral
  • 54. Make it more Social Destination -> Distribution Sharing what you love (via Facebook, Twitter, blogs, etc) Mixcloud helps tell friends what you are listening to 25
  • 55. Conversion funnel + Viral loop (see also Dave McClure on metrics bit.ly/npbootstrapmetrics) ! ! ! ! ! ! ! ! Visitor ! ! ! ! Registered user 18% Integrate with FB + Twitter <20% Invite friends 10%
  • 56. Social lessons & tips from Mixcloud Do you have a social object? Convert users -> marketers Build features and processes to help them do this Reduce cost per acquisition
  • 59. Biggest cost = Biggest Asset Headcount -> burn rate Equity/Debt financing vs self funding Short term revenue vs long term potential
  • 60. THE ART & SCIENCE OF BOOTSTRAPPING 60 9. BUSINESS MODEL PROFITS
  • 61. Profits Offset past losses against profits (get good accountant) Re-invest to help scale Reward contributors -> Fred Wilson equity blog post: bit.ly/npbootstrapequity
  • 62. What we covered Revenue - Models - Checking assumptions - Tips from Mixcloud - Challenges - Mix/single streams - Ad space models - Transactional models Costs - Customer acquisition - Conversion funnels - Social + partnerships - People costs Profits
  • 63. 5 Questions to think about - What type of model(s)? - Trust assumptions? - Who pays? - Social object? - How long till breakeven?
  • 64. In business: If it doesnt make dollars it doesnt make sense But passion/love drives Bootstrappers
  • 65. LAST THOUGHT 65 QUESTION
  • 67. nico@mixcloud.com @nicoperez
  • 68. THE ART & SCIENCE OF BOOTSTRAPPING 68 Q&A
  • 69. PHOTO CREDITS 69 http://www.鍖ickr.com/photos/T/1540007749/ http://www.鍖ickr.com/photos/thomashawk/228228018/ http://www.鍖ickr.com/photos/8078381@N03/3279725831/ http://www.鍖ickr.com/photos/9948354@N08/763399258/ http://www.鍖ickr.com/photos/emry/369409914 http://www.鍖ickr.com/photos/rietje/3719904189