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Ma15: Two Threats NOTES
(The below text version of the notes is for search purposes and convenience. See the PDF version for proper formatting such as bold, italics, etc., and graphics where applicable. Copyright: 2022 Retraice, Inc.)
Ma15: Two Threats
Margin by Retraice^1
On some things that could end our business.
Air date: Wednesday, 25th Nov. 2020, 12:50 PM Pacific/US.
Iceberg basics
The part that you can see doesn't look dangerous; the part that you can't see could be. You and the iceberg both have parts that are above and below the water line.
Our two--my voice,
and the subscriber assumption
Things we see, somewhat in our forward path, that could destroy our business: 1. My voice: I've got a problem with it; if it gets worse, it will kill the business. 2. The subscriber assumption: Will they?
Thoughts on advertising
In a content business, when an audience declines to pay money, they're choosing to pay (only) with their attention. This should be thought of as a choice. If the business then makes money through advertising, it is (perhaps) equivalent to:
* selling the audience's attention, or
* licensing the content to other companies with permission to modify (by inserting adds) and republish it, or
* wholesaling content to retailers who mark it up by increasing the `attention' price (inserting ads).
For us, the issue is finding out, as soon as possible, whether people will subscribe. If they won't, we can pivot to advertising, and look for ways to do it without ruining our credibility.
The subscriber assumption(s)
How do we test the subscriber assumptions^2 , e.g.:
* that people will subscribe under some (yet unknown to us) circumstances;
* that they need a body of content first;
* that they're willing to go through sign-up;
* etc.?
It might be (for us) as simple as just pay-walling a segment. But is that a test? It's hard to know what the unit should be. When does a single test cycle start and end? If we get no subscribers after the first pay-wall, what does that really tell us? Anything? How about after the fifth? The five-hundredth?
Pivoting
Given the icebergs of our business, and our recent experience dabbling in code, software has got our attention.
Hard businesses and soft businesses
It's the difference between customers paying for needs and customers paying for wants. Retraice, in its current form, is a soft business.
References
Margin (2020/10/22). Ma4: Assumptions (A Wrestling Match). retraice.com.
https://www.retraice.com/segments/ma4 Retrieved 24th Oct. 2020.
Ries, E. (2011). The Lean Startup. Currency / Crown / Penguin Random House. ISBN: 978-0307887894. Searches:
https://www.amazon.com/s?k=978-0307887894
https://www.google.com/search?q=isbn+978-0307887894
https://lccn.loc.gov/2011012100
Footnotes
^1 https://www.retraice.com/margin
^2 On testing assumptions, see Ries (2011), e.g. p. 81 `Strategy Is Based On Assumptions'. See also Margin (2020/10/22).
View all episodes
By Retraice, Inc.(The below text version of the notes is for search purposes and convenience. See the PDF version for proper formatting such as bold, italics, etc., and graphics where applicable. Copyright: 2022 Retraice, Inc.)
Ma15: Two Threats
Margin by Retraice^1
On some things that could end our business.
Air date: Wednesday, 25th Nov. 2020, 12:50 PM Pacific/US.
Iceberg basics
The part that you can see doesn't look dangerous; the part that you can't see could be. You and the iceberg both have parts that are above and below the water line.
Our two--my voice,
and the subscriber assumption
Things we see, somewhat in our forward path, that could destroy our business: 1. My voice: I've got a problem with it; if it gets worse, it will kill the business. 2. The subscriber assumption: Will they?
Thoughts on advertising
In a content business, when an audience declines to pay money, they're choosing to pay (only) with their attention. This should be thought of as a choice. If the business then makes money through advertising, it is (perhaps) equivalent to:
* selling the audience's attention, or
* licensing the content to other companies with permission to modify (by inserting adds) and republish it, or
* wholesaling content to retailers who mark it up by increasing the `attention' price (inserting ads).
For us, the issue is finding out, as soon as possible, whether people will subscribe. If they won't, we can pivot to advertising, and look for ways to do it without ruining our credibility.
The subscriber assumption(s)
How do we test the subscriber assumptions^2 , e.g.:
* that people will subscribe under some (yet unknown to us) circumstances;
* that they need a body of content first;
* that they're willing to go through sign-up;
* etc.?
It might be (for us) as simple as just pay-walling a segment. But is that a test? It's hard to know what the unit should be. When does a single test cycle start and end? If we get no subscribers after the first pay-wall, what does that really tell us? Anything? How about after the fifth? The five-hundredth?
Pivoting
Given the icebergs of our business, and our recent experience dabbling in code, software has got our attention.
Hard businesses and soft businesses
It's the difference between customers paying for needs and customers paying for wants. Retraice, in its current form, is a soft business.
References
Margin (2020/10/22). Ma4: Assumptions (A Wrestling Match). retraice.com.
https://www.retraice.com/segments/ma4 Retrieved 24th Oct. 2020.
Ries, E. (2011). The Lean Startup. Currency / Crown / Penguin Random House. ISBN: 978-0307887894. Searches:
https://www.amazon.com/s?k=978-0307887894
https://www.google.com/search?q=isbn+978-0307887894
https://lccn.loc.gov/2011012100
Footnotes
^1 https://www.retraice.com/margin
^2 On testing assumptions, see Ries (2011), e.g. p. 81 `Strategy Is Based On Assumptions'. See also Margin (2020/10/22).