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Justin and Jason discuss TweetMiner’s revenue growth, raising money using customer development, how to keep from burning out, tweaks for improving productivity, building a startup based on solving your own problem, when to use the MyISAM and InnoDB database engines, storing schema-less data using JSON, the Cambrian explosion of distributed databases and the statistical significance of user behavior data.
Ok guys you need to learn to stop saying “you know” every sentence. Otherwise the content is interesting, but this is so distracting, I couldn’t listen to all of it.
Around 20 minutes in you discussed emailing an existing user base to promote an unrelated project / product. Unless your users have opted in to receive such email this would be a violation of the CAN-SPAM act. You should NEVER use email marketing for anyone who has not explicitly chosen to receive such email.
There are ways around this. You can put language in your user agreement and privacy policy to allow occasional promotion of the owner’s / employee’s other projects. If you don’t overdo it most users would probably be fine with this.
@Dan DeFelippi
I had the feeling that as we were saying it – it wasn’t going to go down that well… Thx fore the feedback. 🙂
@niczar Yeah, that’s a fair criticism. While listening to a playback of the podcast I noticed that as well. Wince.
Catching up on your podcasts. Good work guys, thanks. I’m glad TweetMiner is moving forward. I still remember $324 I got first month my software went live 🙂 You’re doing great Justin. Just wanted to offer a couple of thoughts:
Please put “Plans and Prices” on the front page. I was reading that it increases sign-ups significantly. I know I’m the same way, I never sign-up if I don’t know how much it’s going to cost. “Signup Free” is very vague. You should either say “100% free service” or put prices on the front page.
Do you have businesses using your app? If you do, you should think about business pricing. For most businesses difference between $20 per month and $30-$50 per month is negligible. Think of it this way: if TweetMiner saves a person who’s paid $40/hour at least 2 hours a month, paying $40/month makes great sense. You can estimate how much time TweetMiner saves and put it on your website.
You said that most users login for a few minutes a day, search couple of times, send a few tweets and logoff. As far as I understand you have no chance to convert those users to paid users using Twitter API calls limitation. Did you think about offering 30-60 day trial instead of free accounts? I’m not very familiar with Twitter so I don’t know how many competitors you have and how sticky your app is. But think about this: if you don’t have free users, only trials, you can have $3-$5 plan for those who are using TweetMiner for free now. Yes, you will convert only 2%-4% of free users to paying customers but you won’t have to support hundreds of thousands free users forever.
I made a big mistake of making free software thinking it will drive traffic and sales of paid software. Now we are spending 2-3 hours a day supporting hundred thousand free users. Of course it’s a little different with desktop software and it requires more support but still. If your free offer does what most users want, you will have the hardest time selling them something. Think about what will happen when you get to 100,000 free users. Will your paying users provide enough revenue to keep you in business? How much time will you spend answering questions? Will you have enough money to hire another person to help you?
Sorry if that sounds like a rant but after 6 years of making/supporting free software I think offering something for free is a mistake that makes everyone in the industry suffer. Of course, if your plan is to sell TweetMiner to Twitter, everything above doesn’t apply. Make all accounts free, get VC funding when you get bigger and forget everything I said 🙂
@Michael Rakita
Thanks for your advice. For the moment I actually want to have a free version with a small percentage of users to upgrade to premium. I’ve found that by making it completely free on the homepage that a lot of users sign-up. I guess I could try adding a see plans and pricing button on the homepage to see what happens though… it would be an interesting experiment 🙂 For the moment it’s actually going quite well (when I think about it) with over $700 revenue in the first 2 months. I think TM has the potential to be an interesting lifestyle business, it’s just a matter of tweaking and trying out different ideas.
I would have to agree with Jason that TweetMiner has a far bigger potential market that Balsamiq.
Interestingly I think both are the only two services I think I have bought off the net.
Yeah, I’m not saying that you shouldn’t have a free plan. I’m just saying that you should have a model that scales well. If you get enough paying customers to support all your free users that’s great. But if you have to raise prices just to support your free userbase (paying for the server, providing support etc.), you might have a problem in the long run. Just saying 🙂 Tweak and test and you will see what works best for you.
@Michael Rakita
Cool. I’ve calculated that I can support about 20,000 free users (and make some money) if I get 5% signup rate… um. I’m currently getting about 2.2% so lets see!