3.15.2006

Free Web Service Adoption Curve
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Free Web Service Adoption Curve

According to the Santa Fe Institute and Stanford researchers, what gets ahead, stays ahead.

If we take the number of visitors (v) to a site and divide that by the number that actually sign up for (s) something, which may also be mapped into quadrants of increasing heat, you can calculate the effectiveness of an application in developing a user base. v/s = adoption rate (ar). How steep this slope is speaks volumes.

The frontier of this population can be expressed as a function f(potential audience(pa) x (ar)). Therefore, if there exists a property with a known quantity pa where ar is also known (usually this is another property) it is possible to estimate the future audience.

If the model is to be advertising, known CTR and CPMs are divided by the estimated size of the future audience, multiplied by the estimated lifetime value of the customer, which is determined based on products available today and in the pipeline, more credit is given for patents, defensible technologies (e.g., a sandbag bunker position) and actual code than for conjecture and hope.

Both parties benefit when the slope for the larger property is also increased or shored up vis-a-vis the steeper slope of the smaller.



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