52 Bicycles

I shamelessly reprint Jitendra Gupta’s chart from How to Build a Profitable Startup by Knowing Your Users Better (which is itself a summary of Jeremy Liew’s post, Three ways to build an online media business to $50m in revenue.

Wow - good analysis.

Rockwell has a great comment on the source piece:

I think the lesson here is that trying to achieve large returns on online media businesses is currently a losing proposition. From what I’ve seen, the trend is towards greater compartmentalization - instead of people hanging out on MySpace, they’re hanging out on sites that are explicitly geared towards their interests. Unfortunately for VCs, most of these sites don’t require much in the way of capital to get started.

Increasing revenue per person you interact with will increase profits, because same-person/same-customer/same-store increases do not involve acquiring more people/customers/stores, so more of the top line flows to the bottom.  This might not be the path to $50MM in revenue, but it might be the best path to maximizing the bottom line and total cash output of the enterprise.

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