- What's the revenue per visit? (RPM). For every thousand visitors, how much money does the site make (in ads or sales)?
- What's the cost of getting a visit? Does the site use PR or online ads or affiliate deals to get traffic? If so, what's the yield?
- Is there a viral co-efficient? Existing visitors can lead to new visitors as a result of word of mouth or the network effect. How many new visitors does each existing user bring in? (Hint: it's less than 1. If it were more than 1, then every person on the planet would be a user soon.) This number rarely stays steady. For example, at the beginning, Twitter's co-efficient was tiny. Then it scaled to be one of the largest ever (Oprah!) and now has started to come back down to Earth.
- What's the cost of a visitor? Does the site need to add customer service or servers or other expenses as it scales?
- Are there members/users? There's a big difference between drive-by visits and registered users. Do these members pay a fee, show up more often, have something to lose by switching?
- What's the permission base and how is it changing? The only asset that can be reliably built and measured online is still permission. Attention is scarce, and permission is the privilege to deliver anticipated, personal and relevant messages to people who want to get them. Permission is easy to measure and hard to grow.
Seth Godin on analyzing web businesses
Seth Godin has a great post on analyzing web businesses. Here are the six things he suggests you assess in any such business:
