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Offline bytemaster


I would like to take a moment to comment on the recent fall in the price of BTS.   In a word it all boils down to a very common problem in the world of startups, the cost of user acquisition is higher than our ability to monetize it under the current model.   To convey my point I would like to quote some from this blog:

http://www.forentrepreneurs.com/startup-killer/

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However after closely watching several hundred startups that have failed, I observed that a very large number of these had solved the product/market fit problem, but still failed because they had not found a way to acquire customers at a low enough cost.

Quote
I would like to propose that in addition to team, product, and market, there is actually a fourth, equally important, core element of startups, which is the need for a viable business model. Business model viability, in the majority of startups, will come down to balancing two variables:

Cost to Acquire Customers (CAC)
The ability to monetize those customers, or LTV (which stands for Lifetime Value of a Customer)
Successful web businesses have long understood these metrics as they have such an easy way to measure them. However there is a lot of value in looking at these same metrics for all other businesses.

To compute the cost to acquire a customer, CAC, you would take your entire cost of sales and marketing over a given period, including salaries and other headcount related expenses, and divide it by the number of customers that you acquired in that period.  (In pure web businesses where the headcount doesn’t need to grow as customer acquisition scales, it is also very useful to look customer acquisition costs without the headcount costs.)

To compute the Lifetime Value of a Customer, LTV, you would look at the Gross Margin that you would expect to make from that customer over the lifetime of your relationship. Gross Margin should take into consideration any support, installation, and servicing costs.



As a DAC many of us assumed that if we built it they would come.   Our product solves so many problems in the crypto-currency space and leads in many ways, but it is currently failing because the cost to gain a new user is higher than we can afford with either transaction fees or dilution.    In other words the only thing that can keep this ship moving forward is additional funding and a change to the business model of the DAC that so that it can generate more revenue per user than it costs to acquire a new user.   



Fortunately for us there are many viable ways to both raise money, increase revenue per user, and lower the cost of acquisition.   None of this can happen over night, but what matters it that we are AWARE of what need to be done and are actively taking steps to change the direction of this ship.   

We have a well thought out referral program that will be game changing and that cannot be gamed.  I would like to thank Max for inspiring our solution the details of which will come out as part of a new white paper.     We will be increasing transaction fees, offering bulk discounts, and overall creating a system that will highly reward businesses and merchants that bring us customers.   

The current low price is hard to look at, but unlike other crypto-projects we are actively looking at this as a startup and adapting as necessary to find the business model that takes us to the moon.    Hang tight, invest in people and you will be ok.   I am not giving up and know that we are innovative enough to eventually succeed in this space.  It has been a learning experience, but fortunately I am a fast learner. 

In our case the cost to acquire a new user is currently well over $100, we need to find a way to fund that while lowering costs.

For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline btswildpig

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Re: Why BitShares isn't Taking off and What we are doing about it.
« Reply #1 on: April 12, 2015, 03:51:12 AM »
New users are hard to get , especially for a service with concepts like "private key" "sync" "blockchain" "console" "participation rate"  "wallet file"  "datadir backup"

These concepts scare off a lot of regular people .

I'm expecting centralized services with only the concept of "username" "password" "find my password" while using BitShares as its basic protocol be responsible for most of
the new users in the future .
这个是私人账号,表达的一切言论均不代表任何团队和任何人。This is my personal account , anything I said with this account will be my opinion alone and has nothing to do with any group.

Offline clayop

Re: Why BitShares isn't Taking off and What we are doing about it.
« Reply #2 on: April 12, 2015, 04:00:51 AM »
IMHO it's very easy to get new users. "Come on, and you can make money just by introducing this thing to other people!"

https://bitsharestalk.org/index.php/topic,15265.195.html
Bitshares Korea - http://www.bitshares.kr
Vote for me and see Korean Bitshares community grows
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Offline Troglodactyl

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Re: Why BitShares isn't Taking off and What we are doing about it.
« Reply #3 on: April 12, 2015, 04:03:08 AM »
I think a lot of our grass roots customer acquisition will be greatly accelerated once we have solid light and mobile wallets.

I know that's what I'm waiting for before I start seriously recruiting less technical friends.

Offline Pheonike

Re: Why BitShares isn't Taking off and What we are doing about it.
« Reply #4 on: April 12, 2015, 04:06:53 AM »

Its the user experience. People can understand concept, but the execution is the issue.

Offline Stan

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Re: Why BitShares isn't Taking off and What we are doing about it.
« Reply #5 on: April 12, 2015, 04:34:40 AM »
Yes, you will see layers of abstraction, "skins", that hide the details from the average user.

But that is just the obvious incremental evolution path.

This year we will go further beyond today's BitShares than BitShares is beyond Bitcoin.

(It's not like we have only two years' worth of innovation in us, you know.)

We are just getting started.


I can't believe how many people let themselves get trapped focusing on x0

Our core devs are v0 and our partnerships are a.

He who can integrate, let him integrate.

 :)
Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline rgcrypto

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Re: Why BitShares isn't Taking off and What we are doing about it.
« Reply #6 on: April 12, 2015, 05:36:04 AM »
 +5%
That is exactly what I experienced with the tests I ran on Facebook and Twitter. The cost per conversion is too high.
We are not selling socks here. We are selling a pre version 1 software that most people don't understand why they would need that in the first place.

The affiliate system would be a great way to recruits entrepreneurs and businesses who would then go ahead and gain users.

But running ads to attract users to understand bitshares core is a losing game. (It is still valuable to create content and be involved in the media but direct marketing for bitshares core...nah)

Services like MineBitShares, Moonstone, Limewallet, etc are project that could flourish if they gained an affiliate compensation for bringing in users (may reduce the need to go all out politic and run for a delegate position too).

Curious to know how that plan would be funded.

Any thoughts?


Offline bytemaster

Re: Why BitShares isn't Taking off and What we are doing about it.
« Reply #7 on: April 12, 2015, 05:44:43 AM »
+5%
That is exactly what I experienced with the tests I ran on Facebook and Twitter. The cost per conversion is too high.
We are not selling socks here. We are selling a pre version 1 software that most people don't understand why they would need that in the first place.

The affiliate system would be a great way to recruits entrepreneurs and businesses who would then go ahead and gain users.

But running ads to attract users to understand bitshares core is a losing game. (It is still valuable to create content and be involved in the media but direct marketing for bitshares core...nah)

Services like MineBitShares, Moonstone, Limewallet, etc are project that could flourish if they gained an affiliate compensation for bringing in users (may reduce the need to go all out politic and run for a delegate position too).

Curious to know how that plan would be funded.

Any thoughts?

I have it all figured out and am working on documenting it so it can be reviewed.   
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline donkeypong

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Re: Why BitShares isn't Taking off and What we are doing about it.
« Reply #8 on: April 12, 2015, 05:49:21 AM »
What can BitShares do for me? How easy is it to jump on there and make it do what I want? The most important thing is getting the user experience right. The light wallets and on/off-ramps, etc., can make this thing easier to use. I understand the cost-per-user calculation, but what about a pain-per-gain calculation?

At the moment, the pain is the huge freaking hassle of getting started with gateways and exchanges and Bitcoin and then having to arm-wrestle this client, etc. And that's if you even understand how this thing works. To get that far, you'd need to see some value for yourself from the gain side of the equation also.

That side of the equation is simpler, though, since BitShares offers a great deal: instant transactions, nearly zero cost, market-pegged cryptocurrency, plus the upcoming possibilities with user-issued assets, and a ton more. So if people actually understand it, the gain side is monumental; this technology is earth-shattering and transformative. But the pain side still makes these benefits very hard to sell, even when one successfully manages to explain one or more of them.

I'm not only hanging on here, but I just increased my BTS holdings by 10%. I think this is going much, much higher, but it's not easy to change the world.

Offline rgcrypto

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Re: Why BitShares isn't Taking off and What we are doing about it.
« Reply #9 on: April 12, 2015, 06:08:52 AM »
What can BitShares do for me? How easy is it to jump on there and make it do what I want? The most important thing is getting the user experience right. The light wallets and on/off-ramps, etc., can make this thing easier to use. I understand the cost-per-user calculation, but what about a pain-per-gain calculation?

At the moment, the pain is the huge freaking hassle of getting started with gateways and exchanges and Bitcoin and then having to arm-wrestle this client, etc. And that's if you even understand how this thing works. To get that far, you'd need to see some value for yourself from the gain side of the equation also.

That side of the equation is simpler, though, since BitShares offers a great deal: instant transactions, nearly zero cost, market-pegged cryptocurrency, plus the upcoming possibilities with user-issued assets, and a ton more. So if people actually understand it, the gain side is monumental; this technology is earth-shattering and transformative. But the pain side still makes these benefits very hard to sell, even when one successfully manages to explain one or more of them.

I'm not only hanging on here, but I just increased my BTS holdings by 10%. I think this is going much, much higher, but it's not easy to change the world.

I agree 100%. In my opinion, Bitshares core should not focus on user experience at all but on making a scalable, high quality blockchain while having entrepreneurs create application that have great user experience. (Moonstone for example) So if we can use affiliate compensation to attract more entrepreneurs, more developments, more services then we can start seeing real life problem solved by more people.


Offline merivercap

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Re: Why BitShares isn't Taking off and What we are doing about it.
« Reply #10 on: April 12, 2015, 06:44:14 AM »
I agree with all the comments on the thread. 

Also it's hard to measure traction when the webwallet is still in beta. 

We have a well thought out referral program that will be game changing and that cannot be gamed.

  +5% +5% +5% :)


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Offline wuyanren

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Re: Why BitShares isn't Taking off and What we are doing about it.
« Reply #11 on: April 12, 2015, 06:49:20 AM »
I think developers credit overdraft too much,I feel that we should do is let restore confidence

Offline Overthetop

Re: Why BitShares isn't Taking off and What we are doing about it.
« Reply #12 on: April 12, 2015, 06:58:46 AM »
 +5%
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Offline btswildpig

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Re: Why BitShares isn't Taking off and What we are doing about it.
« Reply #13 on: April 12, 2015, 07:35:45 AM »
100 USD / user ?

place 5000 USD as bounty for people outside of crypto space , you may get 10000 users , that's 0.5 USD per user .

Start with grass root beauty pageant ...........   
这个是私人账号,表达的一切言论均不代表任何团队和任何人。This is my personal account , anything I said with this account will be my opinion alone and has nothing to do with any group.

Offline rb2

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Re: Why BitShares isn't Taking off and What we are doing about it.
« Reply #14 on: April 12, 2015, 08:29:19 AM »
I've read multiple times that some companies are waiting for a 1.0 release to integrate bitshares. If hat's true, shouldn't the focus be on a 1.0 release?

Also, there are some initiatives that are presented as game changing, but get lost. An example: the cart integration. It has been done, but in the website I do not see references of that.

Finally, I feel like the focus is always changing. At times it's bitassets,then it's the 1.0,  now it's user acquisition while as many said, the pain to become a user is still too high...

Take this as constructive feedback, I do not pretend I would do better ;-)

 

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