Monday, January 09, 2012

The Berkus Method - Valuing the Early Stage Investment.

From Berkonomics

You should be able to adopt it to most any kind of business enterprise if your aim is to establish an early, most often pre-revenue valuation to a start-up that has potential of reaching over $20 million in revenues within five years:
If Exists:Add to Company Value up to:
Sound Idea (basic value)$1/2 million
Prototype (reducing  technology risk)$1/2 million
Quality Management Team(reducing execution risk)$1/2 million
Strategic relationships (reducing market risk)$1/2 million
Product Rollout or Sales(reducing production risk)$1/2 million

  Once a company is in revenues for any period of time, this method is no longer applicable, as most everyone will use actual revenues to project value over time.

What is Boxing Day!

From Quora - Lou DavisEmergency Nurse, Clinical Nurse Educator

Boxing Day is the 26th December and is a national holiday in the UK and Ireland.

Why is it Called Boxing Day:

Arguments abound on the origins of the name Boxing Day.

A ‘Christmas Box’ in Britain is a name for a Christmas present.

Boxing Day was a day off for servants and when they received a ‘Christmas Box’ from the master. The servants would also go home to give ‘Christmas Boxes’ to their families.

A box to collect money for the poor was placed in Churches on Christmas day then opened the next day.

Great sailing ships when setting sail would have a sealed box containing money on board for good luck.If the voyage were a success the box was given to a priest, opened at Christmas and the contents given to the poor.

A/B Testing

- Reposting from Wikipedia

A/B testingsplit testing or bucket testing is a method of marketing testing by which a baseline control sample is compared to a variety of single-variable test samples in order to improve response rates. A classic direct mail tactic, this method has been recently adopted within the interactive space to test tactics such as banner ads, emails and landing pages.
Significant improvements can be seen through testing elements like copy text, layouts, images and colors. However, not all elements produce the same improvements, and by looking at the results from different tests, it is possible to identify those elements that consistently tend to produce the greatest improvements.
Employers of this A/B testing method will distribute multiple samples of a test, including the control, to see which single variable is most effective in increasing a response rate or other desired outcome. The test, in order to be effective, must reach an audience of a sufficient size that there is a reasonable chance of detecting a meaningful difference between the control and other tactics: see Statistical power.
As a simple example, a company with a customer database of 2000 people decides to create an email campaign with a discount code in order to generate sales through its website. It creates an email and then modifies the Call To Action (the part of the copy which encourages customers to do something - in the case of a sales campaign, make a purchase). To 1000 people it sends the email with the Call To Action stating "Offer ends this Saturday! Use code A1", and to another 1000 people it sends the email with the Call To Action stating "Limited time offer! Use code B1". All other elements of the email's copy and layout are identical. The company then monitors which campaign has the highest success rate by analysing the use of the promotional codes. The email using the code A1 has a 5% response rate (50 of the 1000 people emailed used the code to buy a product), and the email using the code B1 has a 3% response rate (30 of the recipients used the code to buy a product). The company therefore determines that in this instance, the first Call To Action is more effective and will use it in future sales campaigns.
In the example above, the purpose of the test is to determine which is the most effective way to impel customers into making a sale. If, however, the aim of the test was to see which would generate the highest click-rate - i.e., the number of people who actually click onto the website after receiving the email - then the results may have been different. More of the customers receiving the code B1 may have accessed the website after receiving the email, but because the Call To Action didn't state the end-date of the promotion, there was less incentive for them to make an immediate purchase. If the purpose of the test was simply to see which would bring more traffic to the website, then the email containing code B1 may have been more successful. An A/B Test should have a defined outcome that is measurable, e.g. number of sales made, click-rate conversion, number of people signing up/registering etc.

Sunday, January 08, 2012

Start Now, No Funding needed

This is answer to startup related question from  Unni Krishnan Koroth  

  1. Dont quit your job now.
  2. Find a cofounder. If you are from a technical background(Hacker), find a person who can sell and collect money from your future customers(Pirate). If he doesnt have a job now, he can take care of the company formation and other works while you can support him continuing in your present job.
  3. Talk to your family about this. Please note that the social status of entreprenurs are very low in India. They get high status only when they succeed. If you have financial commitments, finish it before resigning from your job. You should start your company with a clear and focused mind.
  4. Make an emergency fund. 50,000 rupees per year for the next 3 years. It takes minimum 3 years to build a good company.
  5. Don't take an office. Don't recruit employees. If you are doing a business it should be a scaling of what you can do alone. See this video 
  6. -
  7. When you are quiting your job, dont burn the bridges. Keep good relation with your existing company.
  8. Register the company and a good domain name. Start working and focus on giving value to your customers.
  9. And remember "People overestimate what they can achieve in one year. But they underestimate what can be achieved in ten years."
  10. Save every single rupee. Enjoy getting rejected from your potential customers

Monday, January 02, 2012

Twitter for India

India flavour on Twitter homepage