Re:Ask YC: How To Prioritize
by skmurphy on Saturday February 23, 2008 @05:48PM
(#122246)
Don Reinertsen http://www.reinertsenassociates.com/ author of "Developing Products in Half the Time" and "Managing the Design Factory" has a great quote about managing product priorities that bears on this.
"Priorities: Last Refuge of the Innumerate
What is our highest product development priority, cycle time or unit manufacturing cost? To even ask this question, suggests a fundamental misunderstanding of product development economics. If cycle time takes priority over unit cost, then it follows that we would prefer the smallest improvement in cycle time to the largest improvement in unit cost. If unit cost takes priority, then we would prefer the smallest improvement in unit cost to the largest improvement in cycle time. Does this make any sense? Of course not. When we prioritize we give strict precedence to one objective over another. Such strict precedence leads to bad economic choices.
The value of cycle time and the value of unit cost must be expressed in the same unit of measure: life cycle profit impact. It is only with this quantification that we can make good economic decisions to trade one for the other. Setting priorities for individual measures of performance is simply avoiding the important job of understanding how performance influences economics."
It sounds like you need a simple model for what the site will look like when it's profitable (e.g. number of customers, how often they visit and how many times in total do they visit (customer lifetime), what does it cost to acquire them, what and how much do you charge for, how often do they refer other customers...). Once you have some numbers on your model you can then build a plan to evolve toward it.
I am inferring that you are going to be a subscription site ("haven't implemented billing") I would get that done right away and see if you've built something that even a small number of folks will pay for. There can be a world of difference between what people like and what they will pay for. Focus on what they will pay for in a subscription site.
"Priorities: Last Refuge of the Innumerate
What is our highest product development priority, cycle time or unit manufacturing cost? To even ask this question, suggests a fundamental misunderstanding of product development economics. If cycle time takes priority over unit cost, then it follows that we would prefer the smallest improvement in cycle time to the largest improvement in unit cost. If unit cost takes priority, then we would prefer the smallest improvement in unit cost to the largest improvement in cycle time. Does this make any sense? Of course not. When we prioritize we give strict precedence to one objective over another. Such strict precedence leads to bad economic choices.
The value of cycle time and the value of unit cost must be expressed in the same unit of measure: life cycle profit impact. It is only with this quantification that we can make good economic decisions to trade one for the other. Setting priorities for individual measures of performance is simply avoiding the important job of understanding how performance influences economics."
It sounds like you need a simple model for what the site will look like when it's profitable (e.g. number of customers, how often they visit and how many times in total do they visit (customer lifetime), what does it cost to acquire them, what and how much do you charge for, how often do they refer other customers...). Once you have some numbers on your model you can then build a plan to evolve toward it.
I am inferring that you are going to be a subscription site ("haven't implemented billing") I would get that done right away and see if you've built something that even a small number of folks will pay for. There can be a world of difference between what people like and what they will pay for. Focus on what they will pay for in a subscription site.