These benchmarks can tell you whether your business plan is viable

From Things I’ve Learned About How to Build Good Product by Peter Nixey:

1. Golden rule of social: 90% of people consume, 10% of people curate, 1% of people create.
2. Rules of engagement: Registered users / installs — 30% will use it each month, 10% will use it each day, 1% will use it concurrently.
3. Fremium conversion: 1% of your signups will pay (normally 1-5%).
4.  Expensive is profitable: “50% of our revenue comes from only 11% of our customers” — Ryan Carson, founder Carsonified and Treehouse.
5. Cheap is expensive: Cheap accounts cost more in support (7x).
6. Advertising revenue: Social network CPM ~$1, Times Newspaper ~$10; $1M / year in revenue = 1bn page views (good luck).
7. Email subscriptions: Open rates = 20-40%, click through rates = 1-5%; 1 sale per 3,000 emails.
8. Churn determines SaaS size: If you have 10,000 customers and 5% leave a year, then you need 500 new ones just to stay level (so your signup rate determines your company size).
9. Is your market size sane? 360m people in the US. There are 6m firms with 1-100 employees (avg. # employees 7.24), 6m firms with 101-500 employees (avg # employees 10.1), and 17,000 firms with 501-10,000 employees  (avg. # employees 1,672).

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