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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

#51

Post by edouard-harris »

novok wrote: post #46
edouard-harris wrote: post #31

Earlier quoted context omitted.

Excellent point. This would have been reason enough to kill the idea irrespective of the CAC calculation. Speaking from extensive marketplace experience: A pattern of long term relationships will lead almost surely* to supply-side defection in your marketplace, which is when the supply leverages its relationship with the demand to set up a side deal that cuts out the platform. This can quickly take both supply-side a…

How does supply side defection work for airbnb except in very edge cases, such as a long term rental. Even then it turns into something like apartments.com

That's exactly how it works. The fact that it's an edge case on Airbnb is what makes the resulting churn survivable.

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

#52

Post by tapland »

nunez wrote: post #47
lowdose wrote: post #3

So these guys have to read up on some articles about multisided marketplaces which what they were testing. Starting a matching platform between consumers and teachers is not a feasible plan because this is a longer term relationship and a platform is easily cut out. A platform like uber works because nobody has a regular cab driver. Supply and demand matching is also terrible for dog walking platforms. Don't spend ti…

How do you explain Angie’s List then?

Don't they also live off once in a while kind of things? A plumber once through the site is a much larger chunk of $ even if I call the same plumber the next time.

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

#53

Post by thehappypm »

nunez wrote: post #47
lowdose wrote: post #3

So these guys have to read up on some articles about multisided marketplaces which what they were testing. Starting a matching platform between consumers and teachers is not a feasible plan because this is a longer term relationship and a platform is easily cut out. A platform like uber works because nobody has a regular cab driver. Supply and demand matching is also terrible for dog walking platforms. Don't spend ti…

How do you explain Angie’s List then?

Two things come to mind (as a homeowner of a fixer-upper).

First, a lot of home repair (not all, but a lot) is small, simple, and fairly commoditized. I used Homeadvisor last week, for example, to repair a broken window, and I wanted it fixed basically as soon as possible. I really just needed a guy with the tools to come in and do the job fast, and Homeadvisor found me that guy quickly.

Second, it's hard to find a good contractor. I'm on my third or fourth plumbing change right now, and have used different plumbers each time. They were all fine, but I haven't yet found someone who I'd absolutely call first. Homeadvisor gets my business until that person comes along.

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

#54

Post by GordonS »

nscalf wrote: post #8
justaguyhere wrote: post #6

Wow, didn't realize adwords and FB ads are so expensive. How do small businesses compete? are there any alternatives for those with smaller ad budgets?

From my experience with adwords/fb ads, this is not normal. The reason the cost is so high is because they're targeting ads to things like "bass" instead of "learn bass from scratch" in Sacramento, CA. The more specific you are, the less competition and the easier to target and win on keywords. The tough part is that being a strong force in the Sacramento, CA Bass market for new players from scratch is not a billion…

Sometimes, more specific actually means more cost - in B2B, I've seen roughly $15 and $7 CPC for heavily contested keyword phrases, and know of a competitor that bids over $30 CPC for a particular phrase.

A slight aside, but although it's definitely market forces at work, I'm certain Google inflates CPC prices before those market forces take hold, forcing the hand of smaller players.

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

#56

Post by unlinked_dll »

throwawayjava wrote: post #13
netsharc wrote: post #7

Earlier quoted context omitted.

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…

> such effing rent-seeking That was also my take-away regarding this idea. 20% cut? For match-making on private music lessons? Fuck that. Our local music store charges less than that for renting an hour in a soundproof room! And the discoverability/match-making "platform" is a free bulletin board next to the restroom... Also love how that email described the radical act of checking the local music store's bulletin bo…

Plus you can get a referral for private lessons from virtually any public or private school music teacher. For free.

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

#57

Post by CrazyStat »

kbuchanan wrote: post #25

This may strike some as silly, but before the iPhone was invented, there were ZERO searches for the term "iPhone". (I assume, ha!) By all means, do market analysis, but remember that demand is not static—it can be shaped by what you offer. I co-founded a firm 13 years ago that now employees 50 people that most certainly would have been killed by this type of analysis.

>I co-founded a firm 13 years ago that now employees 50 people that most certainly would have been killed by this type of analysis.

Which is the goal, because these guys aren't looking to build 50-man companies.

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

#58

Post by stri8ed »

edouard-harris wrote: post #31
lowdose wrote: post #3

So these guys have to read up on some articles about multisided marketplaces which what they were testing. Starting a matching platform between consumers and teachers is not a feasible plan because this is a longer term relationship and a platform is easily cut out. A platform like uber works because nobody has a regular cab driver. Supply and demand matching is also terrible for dog walking platforms. Don't spend ti…

Excellent point. This would have been reason enough to kill the idea irrespective of the CAC calculation. Speaking from extensive marketplace experience: A pattern of long term relationships will lead almost surely* to supply-side defection in your marketplace, which is when the supply leverages its relationship with the demand to set up a side deal that cuts out the platform. This can quickly take both supply-side a…

How would you rank UpWork in this respect?

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

#60

Post by lxchase »

anstosa wrote: post #20
jjn2009 wrote: post #15

Earlier quoted context omitted.

You kill the idea because it is so expensive, if you cannot easily reach consumers for a small amount of money then the demand side is low. It's cheaper to reach consumers who are willing to click links because they actually need a service.

Ansel from PSL here. That's not quite right. Ad pricing is a marketplace like any other. The "demand" in the marketplace is demand by advertisers to get in front of any particular set of eyeballs. The price will be high if many advertisers are interested in the same group of people (and low if not). Price is an important metric for determining customer acquisition cost but you can't use it to infer customer demand. Y…

Generally correct, but do watch out for some recent changes by Google, where you pay what you bid instead of being charged the lowest next bid even if you set your bid higher.
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