The Bill Gurley Chronicles: Part I

There is a huge difference between demand-driven and supply-driven start-ups. Demand-driven start-ups see an area of the market where a need doesn’t have a solution. Then, they create a company to fill that need. Supply-driven start-ups conceive companies on the idea that one day consumers will need their solutions to problems that might not exist ... See more

There are three reasons why success-based advertising wins the day on the internet: -Customers want it: Advertisers can quickly see if their programs work and easily predict margins using COGS + “bounty fee” model-Solves excess inventory problems: The best way to reduce inventory is through direct-selling, success-based advertising (think 1-800 ads... See more

This may be the nirvana of capitalism – increased marginal customer utility. Imagine the customer finding more value with each incremental use. Some may suggest that this concept already exists in the form of volume discounts. However, this offers a vendor no real competitive advantage, as all of its competitors are likely to offer the same discoun... See more

Conversion rate is the most important metric for internet-based companies. Why? Conversion rate captures total user engagement. It also boasts high leverage. Here’s the big idea: as conversion increases, revenue rises and marketing costs decline. There are five things that affect conversion rate: 1) user interface, 2) performance (slow v. fast), 3)... See more