tech-company, business-plan, website, growthWe are currently busy setting up a website which we hope will be very popular. We don’t have a definite plan how to make money yet (we have a couple of ideas, but just nothing definite).
The strategy we’d like to try is getting a reasonable amount of views (and unique visitors, clicks, etc), maintain a steady growth rate and then go from there. Some initial trials with a minimal viable product have shown great promise.
Now something we’re less sure about is saying anything about what’s a good absolute number of views, unique visitors, clicks, etc.
Based on careful research we think we could have approximately 50.000 (raw) views after 6 months and approximately 150.000 views per month after a year. We estimate needing close to 10 people to operate the site after a year (developers, an operator and commercial staff) and expect having monthly costs by then (burn rate) of between 40k euros and 50k euros per month (wages, rent of some office, costs for the servers, data bandwidth etc).
Update: The 50k euros/month is not for the upkeep of the site, but as investment that will be used for the development of new features and products that we predict will bring us even more views in year 3 to 5.
With roughly the same costs per month from then on we expect to double the amount of views after another year (so we’ll do 300.000 views per month then).
Now the question is, would that be good (realistic) numbers to aim for? Of course higher is always better, but we’d like to set a realistic number that we can actually achieve.
Should we indeed be doing that amount of views after a year, would that be considered a good number? How many views did some other popular websites without a definite monetization plan approximately had in their first and second year?
Unless your plan to make money aligns to the type of traffic your getting and does not significantly change the behavior users currently exhibit, such an estimate would be meaningless.
Further, based on the numbers you’re presenting, I would be concerned about the future of the company, since in my opinion your burn-rate should be at most a 100th of what you’re estimating; meaning such a site shouldn’t take more than $500 euros per month to run, not $50k.
It seems as though the number of views should be based on your income per view and how much money you need to make. As a rough example, if you get 100,000 views per month, and earn an average of 1 euro per view, and your expenses and payroll are 90,000 euros per month, then you are getting 10,000 euros profit per month.
You’ll also need to figure in the change in your expenses & payroll over time, and how that compares to the increases in your views per month over time.
Off-the-cuff I think your viewer numbers are optimistic. Whether it’s enough really depends on your ad/revenue model and conversion rates. For instance if you have a conversion rate of 50% (very optimistic) and you’re using an ad network that pays you on average: Eur .25 per click, then with 50k views you’re looking at ~ 6250/mo. (from 25k clicks). A bit short of your 40k/mo. costs.
For more realistic numbers it all depends on your viewers, demographics, what you’re selling/showing, and how you’re monetizing it. If you’re using an ad network like Google adsense (easy, but low income share), and you’re targeting a demographic with high disposable income, and your site is in an industry that shows high-value keywords, then you’ll likely get more than .25/click.
And PPC is not always the highest paying opportunity. PPA (Price Per Action) is typically higher on a per-click basis, but then conversion rates are often lower.
So in short, I’d be more pessimistic with your viewership numbers to start. I’d also do a lot of research. Using Google’s Adword research tool https://adwords.google.com/KeywordPlanner is a good place to get market prices for keywords.
Then once the site is set up, it’s all about testing and analytics. See which words are bringing the most traffic and optimize for that.
Or finally… ignore all the ad stuff and put up a pay wall. Set a subscription price, and require users to join to use it. (Of course this will severely impact your 50k views number).
Good luck.
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