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How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

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Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#111

Post by dragontamer »

briandear wrote: post #81
crikli wrote: post #21

So...to me this article illustrates the dramatic differences in objective and mentality between bootstrappers and VCs. This VC looks at this idea, figures out that in order to own the market and make $fuckton, they'd have to spend > $fuckton. Decides to bail. As a bootstrapper of businesses, I look at this case study and go "well yeah of course it'll take $fuckton because you're haven't focused on a narrow enough nic…

Using that case study, getting $21k in revenue for $80k in expense makes zero sense ever. That doesn’t even count the actual startup cost to build the platform or even get the “talent” to deliver the lessons — which is an expense not to be ignored. So the real $80k is probably much higher because for a marketplace to exist, you have to attract buyers and sellers. And a 30% commission means that music teachers would h…

Real world music lessons scale better, with many beginner classes at Guitar Center (or private centers/homes) scaling to 5ish students per teacher.

It's not as high quality as 1 on 1 instruction, but the benefits of scale cannot be understated. Offer lessons at 1/3 price but make double the revenue.

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#112

Post by cortesoft »

ssivark wrote: post #105
rubyn00bie wrote: post #79

Earlier quoted context omitted.

Well I was right there with you, thinking it was a completely shit idea, but a little math shows how it at least popped up on the radar (and I don't think its quite so bad myself after some thought): 100,000 music instructors, $60 per hour, at 365 days per year is roughly: $2.19 billion gross revenue per year-hour in the segment. Assuming, the average hours per day are like 3.5 (I can't imagine folks doing this are g…

> Assuming they could earn a 20% stake in 100% of the market, that's like $1.53bn. That makes no sense. Why would/should instructors+students continue to give them 20% commission for follow-up classes beyond the first one? It seems like just wishful thinking. The app store situation is very unusual (monopoly/monopsony), and does not apply in this context.

Yeah, this is the problem Wag has been having... and they ended up trying some draconian things to try to prevent people from working outside the system.

These market place ideas don't work nearly as well for businesses where there are long term, repeated, interactions between seller and purchaser. They work best when there is a one time exchange, because a market is really getting paid to make an introduction.

edit: I see now that many people made this argument much more eloquently in other comments on this thread.

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#113

Post by jmull3n »

woutr_be wrote: post #80
Johnny555 wrote: post #75

Earlier quoted context omitted.

Pairing people romantically is so hard to do that dating platforms can count on a long string of revenue from clients. It's going to take many meetups before I find the woman of my dreams, but chances are pretty good that the first maid I get paired with will meet my needs (worst case, maybe I'll need to try one or two more), after a few successful visits, then I can offer to pay direct and cut out the middleman.

Don't people usually cut out the middleman on dating apps straight away? From my experience, after the initial connection, and before the first meet, you usually exchange numbers, and continue through anything else but the dating app. In that aspect, I don't see how it's different than pairing with a maid.

You would only need to be paired with one maid though.

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#114

Post by cortesoft »

cabaalis wrote: post #2

This is very useful insight that I want to apply to my own planned side-projects (like 30-something domains registered as ideas...) Too often I've thought "that's a great idea" and then focused on the tech of implementation rather than the viability. At that point it's just a hobby, or skill-sharpening exercise. Regarding the example shown, I would think that "uber for" ideas (meaning facilitate a connection between…

As others have said on this thread, this model is not very good for frequent, repeated services that are provided by the same person each time. When that happens, it becomes really easy to cut the middle man out and pay the service provider directly.

These services are matchmakers, and the matchmaker can only really be expected to be paid to make the match... not in perpetuity. This is why services like Uber, where you only are matched with a particular driver for a single ride and are unlikely to be driven by the same driver again (at least not intentionally) work so well for a matchmaking service.

If you hire a music teacher, you aren't going to have a different one every week. You don't need the match making services after that first lesson. So why are you going to keep paying the matchmaker?

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#116

Post by woutr_be »

jmull3n wrote: post #113
woutr_be wrote: post #80

Earlier quoted context omitted.

Don't people usually cut out the middleman on dating apps straight away? From my experience, after the initial connection, and before the first meet, you usually exchange numbers, and continue through anything else but the dating app. In that aspect, I don't see how it's different than pairing with a maid.

You would only need to be paired with one maid though.

Correct, and if that maid is a match, you proceed. How is that different from a dating site? In theory they only have to match you with one other person.

But my main point was; on dating sites the middle man is almost always cut out instantly. Usually you try to immediately exchange numbers, and then proceed from there.

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#117

Post by cortesoft »

netsharc wrote: post #7
cabaalis wrote: post #2

This is very useful insight that I want to apply to my own planned side-projects (like 30-something domains registered as ideas...) Too often I've thought "that's a great idea" and then focused on the tech of implementation rather than the viability. At that point it's just a hobby, or skill-sharpening exercise. Regarding the example shown, I would think that "uber for" ideas (meaning facilitate a connection between…

Reading this article and seeing these replies, I feel like a communist who accidentally walked into a Davos hotel lobby during WEF. What about just making a website to connect learners and providers? This commission-taking, the Uber model, such effing rent-seeking. I mean I also don't work for free, but things like "Uber-for-dog-walkers, but we'll fine you much money if you arrange dog walks outside of our service. A…

I mean, there ARE services to provide in this space that aren't rent seeking and are worthy of being paid for... things like financial service (taking payments), escrow service (making sure each side provides the agreed upon service, and arbitrating any disputes), vetting services (could be ratings, background checks, etc), guarantees and insurance... i am sure we could think of many others

I am totally fine with a company providing those services to independent contractors... I just wish they would do more of those things and less of the attempting to force you to keep using their service

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#118

Post by barry-cotter »

arminiusreturns wrote: post #82
anstosa wrote: post #23

Earlier quoted context omitted.

Ansel from PSL here. Absolutely. Because we're venture-backed and are spinning out venture-backed companies, we are limited to billion dollar ideas. It's not uncommon for us to kill great ideas that could "only" make tens of millions of dollars. We're hoping through blog posts like this and other means to be able to share more of them because we want those companies to exist, we're just not set up to create them!

Does this apply to the vast majority of VC's? So if I want to do a yc pitch it needs to be able to have unicorn level potential? Who would you target as investors for tens of millions ideas if so? I'm guessing a larger focus on angels and IB's after a more proven, traditional profit model is shown (often a much different model than VC-startup profit model).

Yes, VC returns are dominated by the huge hits, so everyone is chasing those. Google almost certainly returned more than every other investment made that year for example.

For a tens of millions pitch go to Earnest Capital who will be perfectly happy to invest.

https://earnestcapital.com/

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#119

Post by toohotatopic »

Johnny555 wrote: post #75
toohotatopic wrote: post #33

Earlier quoted context omitted.

... or a soul mate, aka dating platforms.

Pairing people romantically is so hard to do that dating platforms can count on a long string of revenue from clients. It's going to take many meetups before I find the woman of my dreams, but chances are pretty good that the first maid I get paired with will meet my needs (worst case, maybe I'll need to try one or two more), after a few successful visits, then I can offer to pay direct and cut out the middleman.

Or is it not, and dating platforms make it difficult on purpose for people to return?

There was a comment some days ago along the lines of somebody being ordered to switch off a matching algorithm because it was too good.

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#120

Post by toohotatopic »

knlam wrote: post #95
toohotatopic wrote: post #33

Earlier quoted context omitted.

... or a soul mate, aka dating platforms.

at face value, this seems plausible. However, the dating dynamic is unique among other marketplace ideas. Case in point, tinder is profitable (whenever people find their soulmate through it, tinder loses customers)

If they find a soulmate. Tinder is for casual sex, so people are returning.
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