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Ask HN: Can someone explain the economics of AppSumo from founder's perspective?
I keep getting these awesome deal emails - that if I were interested I would get them, about various webapps.
Buy 1 month, and get 6 months free, or pay $49 and get 10 apps in 1.
I would love to hear some real data from people that have listed their app with AppSumo and what the results have been like. What does your Acquistion Cost per Customer look like, in comparison to other channels (say Facebook, Google Adsense, etc.)?
Also, what is the rationale behind it ? Do you only do the buy 1 month, get 6 month deals when you know your Lifetime Value/customer is much longer than 6 months ?
What metrics would I want to look at, from the founder's perspective, before deciding what type of deal to run, and whether or not it makes sense ?
I understand how this could work for downloaded software, because the marginal costs per license is effectively 0. But for hosted web apps, kinda trying to get some real data about that.
Thanks.
- haploid 16y agoI'm guessing that the business model expects Moore's Law to resolve the issue of cost of static lifetime memberships. I paid 17$ for a lifetime MixPanel membership several months ago and it goes basically unused. I was thinking even if I never use it, it's too good a deal to pass up. So there's a bit of the "new years' resolution gym membership" salesmanship going on. Sure you only get 17$, but your costs are $0 for those kind of customers. Pure profit margin.
- petervandijck 16y agoThe marginal cost per license for hosted apps is also almost 0, for many Saas apps.
- revorad 16y agoThe cost of hosting a new customer might be almost 0, but the cost of customer acquisition is anything but. That's what AppSumo is presumably helping with. It's an advertising platform, much like Groupon.
- marcamillion 16y agoThat's what I am trying to figure out...how good are they at doing this.
- aquark 16y agoThe marginal cost per license may be cheap, but there may be a significant support overhead to a flood of new users. Maybe with technical web apps that AppSumo tends to focus on this is less of an issue. I've found a certain portion of non-technical users want some degree of contact with the company just to assure themselves there is a warm body at the other end. Of course, the feedback from those users would also be valuable to the startup.
- marcamillion 16y agoThe cost per license for hosted app is also almost 0, but what about those webapps that consume space - e.g. say a Dropbox or Basecamp - that actually gives storage. Then surely it's not 0. If it is something like an accounting app, then sure....but I am talking about apps that will incur a cost per each new user.