All Users Are Not Created Equal

Brad Feld called Josh Kopelman’s recent blog entry, 53,651, “a perfect post.” I completely agree with Josh’s fundamental premise – that there is a strong disconnect between new Web 2.0 companies claiming traction with plugged-in Silicon Valley geeks and real usage by “Mainstreet USA” consumers. Regular readers know that I’ve blogged about this situation myself in past posts The Divide Between Geeks and My Grandmother, Leaping from “Digerati-Facing Services” to “Consumer-Facing Services”, and Between the Valley and Everyone Else.

I think that a greater point here isn’t that the first X number of users for a web service are irrelevant (as some have suggested), but that all users are not created equal. What really matters is if the current users of your service are in the eventual target market and how well they are interacting with your service. At our startup Sombasa Media, we found that the “quality” of the users – as defined by how active they are with the service and ultimately how monetizeable they are – varied greatly by how they were acquired. Paid search, natural search, affiliate programs, opt-in lists, CPA campaigns, CPC media buys, PR, recommend-a-friend, other viral traffic, etc. all had resulting different levels of user quality. So we tracked and measured these various traffic sources, paying attention not only to the top-line user & traffic count, but also the levels of quality contained within. The same should be said today as there are addition ways to acquire traffic (blogs, RSS SEO, MySpace viral “seeding”), including a profile on TechCrunch. It’s a matter of understanding the context of the user/traffic numbers in addition to the figures themselves.

In the end, having 53,651 users is a relative number for any consumer-facing web service. (They are irrelevant if they are all TechCrunch readers who will never use the service in the long-term.) What I would want to know is who they are, how they got there, and why they’re using the site.

David Beisel

David Beisel is a co-founder and Partner at NextView Ventures. He has been focused on early stage Internet startups his entire career, both as an entrepreneur and venture capitalist. As an investor in the digital media space, David was most recently a Vice President at Venrock and previously a Principal at Masthead Venture Partners. Prior to becoming a venture capitalist, David co-founded Sombasa Media, an e-mail marketing company best known for its flagship product BargainDog. Sombasa was successfully acquired by where David served as Vice President of Marketing. David holds an MBA from the Stanford Graduate School of Business and an AB in Economics, magna cum laude and Phi Beta Kappa, from Duke University. He also founded and leads the Boston Innovators Group, an organization which holds quarterly entrepreneur events drawing a thousand attendees.