Viral Campaigns from an Investors Perspective

Joysy JohnFounder & CEO, FoundersFit.com

@JoysyJ, @startlead

#AngelLab, #FoundersFit

21 Jul 2012, London Match N Hack

Agenda

• Introduction• Why Viral Campaigns work• How Viral Campaign drives growth• 3 Things that matter• Q&A

IntroductionAngel Investor, Ex-Banker, Founder, Social EntrepreneurComputer Engineer, MBA

Why Viral Campaigns work

Market for social apps is growing

2012

1

2

3

4

5

6

7

8

9

10

1

2

3

4

5

6

7

8

9

10

2005

(U.K.)

Wikipedia.org

2012 Alexa Global Traffic Rankings

How Viral Campaigns Work

UserCall to action to invite friends x = invited

friends

Accept?Yes

y% = invite accept rate

x * y > 1 gives you viral growth!

Viral loop cycle time impacts how quickly you grow

Channels

• Focus on 1-to-Many to get People Engaged– News Feed– Profile– Notifications– Non User Pages

• Focus on 1-to-1 to re-engage current users– Email– Notifications

3 Things that Matter

Users

Acquisition cost

Conversion rate

0

10

20

30

40

50

1 3 5 7 9 11 13 15 17 19 21 23

Months (1)

Source: eBay Investor Presentation, RockYou(2) eBay starts Q2 98, PayPal starts Q1’00, Yahoo! starts Q1’95, AOL starts Q1’92, Facebook starts Q4’04, and RockYou Starts Q4’05(3) Facebook data represents active users, which was disclosed on 12/05 and 12/06. Undisclosed active user data is extrapolated by applying an average active user penetration to

global Unique Visitors (per comScore Media Metrix)

Facebook platform launch

(2)

Reg

iste

red

Use

rs (

MM

)R

egis

tere

d U

sers

(M

M)

Customer Acquisition Speed Matters

Customer Acquisition cost matters

Conversion (%)

Dropbox Conversion rate of 3%

Dropbox Conversion rate of 5%

Using Metrics to Drive Product Design

• A/B test entire user flows• A/B test calls to action• Base decisions off of statistically significant data

Flow A

Flow B

An new users

Bn new users

X% user dropoff Y invites sent/user Z% invites accepted

Role of Marketing / SalesQ: What channels? Which users? Why?A: High Volume (#), Low Cost ($), High Conv (%)

Design & Test Multiple Marketing Channels + Campaigns Select & Focus on Best-Performing Channels & Themes Optimize for conversion, not just site/landing page Match/Drive channel cost to/below revenue potential

Low-Hanging Fruit: – Blogs– SEO/SEM– Landing Pages– Automated Emails

Conclusion

Keep it simple

Think of incentives for sharing

Optimize for conversion

Set up balanced teams