How to measure if it's worth to keep investing in a project?
Some weeks ago, I started investing in a project some weeks ago (discountshunter.net), I put money for development and some times and my time for managing the project (some times even coding a bit).
I have been wondering how to measure whether is worth to keep investing on it but I find that to be a very hard question.
Recently, we launched the project to the public, opened some social fan pages, and started with some marketing there.
Some statistics:
- We got a little bit more than 100 downloads but that doesn't mean much to us as we are not able to track daily users accurately, people may have installed the app but aren't actually using it.
- On social media, we got around 300 likes which actually doesn't mean much either.
I have been thinking that we must create a pro version and charge for it.
I would like to keep this project running until the end of the year and evaluate if it's worth to invest more in it, but I don't know how to measure that.
The questions:
- Assuming we start charging for a pro version, is it ok to think the product is viable if we get some paying users (I was thinking on 10-50)?
- Assuming we start counting active users, would it be reasonable to expect 200 active users before the end of the year?
- What would you suggest to measure if is worth to invest more?
Thanks.
Try to get some paying users, but bear in mind that conversion rate from free to paid can be less than 5%. So it is possible that with 100 free downloads, even if you don't get any paid users, that may not be a reliable signal the product isn't viable.
But whether to invest more is really up to you. If you define a success metric, and your product fails based on that metric, you have the choice of either calling it quits, or keeping at it and trying to improve. Maybe the first 100 users are not the right target market, and if you find the right customers then your product is successful. Or maybe a few improvements to the product would help it take off.
One thing you can do is a "killer experiment". Rather than looking for a signal that your idea is working, look for one that it will not work. What is the biggest assumption that, if false, would invalidate your idea?
I'm aware of the conversion rate is not a reliable metric.
About the "killer experiment", that's an easy one, I should be able to get paying customers to fund the project, either as the users or companies paying for some kind of ads (or at last, investors, why not?).
My biggest problem is that I have no idea how similar apps defined their success metrics, I could just define anything like the number of active users but that doesn't mean that the metric is a good one.
Thanks.
I’d start with what your goals were when you made it. Were you trying to solve your own problem or were you looking to validate that people would want a price monitoring service?
It seems to me that youre lacking data to tell you if this is the case. Maybe you should go and talk to the users and ask them if they find it useful or not and how much they’d pay?
More to the point is what do you expect? What would make you happy for a goal?
The project started because my wife wanted such service and I though it would be ok to give it a try with the public, so, on that sense, we are using it
I have already talked to some users which find it pretty useful but I haven't asked about pricing, in my personal case I would believe that if something saves me $10, I should not question paying $5 (but that's logical thinking which most people seem to not use).
About what to expect, that's the problem, I don't know what should I expect and that's why I came to ask.
What would make me happy is to see the project being sustainable but I need to find a reasonable monetization method first.
Thanks.
Thats cool. Nothing better than to help your wife!
One pricing model I’ve been thinking of is a incentive based one - ie only get charged x if you save you otherwise nothing. But I agree with you - monetization is the eventual key to further investment.
I’ve been focused on product warranties for camping gear - if you want to look at watching prices for those types of items - I can run a quick test to see if folks would be interested.
Trustfuss.com
That's exactly the pricing model I have been considering to implement, charging only if you get a discount above X amount, or your money back if you don't get any, the first one is harder to enforce.
I've sent you an email to discuss further your idea.
Thanks.