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Comment by suhail | Hacker News Reader

You need demand and user retention. Just the former is a false sense of success. Many startups flameout without the latter at high frequency. I've witnessed 100s.

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Yes! The way I explain it: a sustainable business is one whose customers keep come back because they were satisfied. Until you see that happening, even revenue could be a vanity metric.

(There are exceptions, of course. LASIK surgery, for example. In which case something like NPS can be a better key metric. But generally, repeat business is the best proof that you've got something real.)

Agreed with all the above. Retention is the best long term predictor of success of every business I’ve seen. Growth can be fast or slow- what matters is do you keep your customers around.

Also, uh, money. Coming in. Income. You need this. If you don't have income (or a clear road map to it before you run out of funding) then you don't have a company, you have a Ponzi scheme.

Sorry, but do you think Google (prior to turning on AdWords) was a ponzi scheme?

>Both Brin and Page had been against using advertising pop-ups in a search engine, or an "advertising funded search engines" model, and they wrote a research paper in 1998 on the topic while still students. They changed their minds early on and allowed simple text ads.

Sounds like a road map.

(Wikipedia)

But here we should remember what internet ads were like before the appearance of textual Google ads. They were image banners of standardized sizes, much more intrusive and way more pointless.

I think that depends on your definition of intrusive.

Prior to adwords, what was their business model?

Go.com w/ Overture, acquired by Yahoo - that had PPC offerings before Google even had a monetization strategy.

Did they have no road map to profitability before they just accidentally happened to turn on AdWords, which they had built for no reason?

Sorry, but did google run out of funding?

And a path to profit. If the moment you make it profitable demand evaporates, you have nothing.

Yes indeed!

I agree to this. In fact — product/market fit can be measured from the traffic by studying the user experience and frequency of visits. We just launched a product that can do this:

https://volument.com/product-market-fit

No it can’t. It is measured by people paying you for your product at a price that is higher than the cost to deliver the good or service. Visiting your website a lot isn’t an indicator of anything. It’s a vanity metric.

Conversions are the tip of the iceberg when people want your product. They first come to your site and find it interesting (stay rate), then they crawl more pages and read more (user experience or "engagement"), then they return doing that more — and the more they return the better the market (product/market fit).

And the better the market the more they convert (member conversion rate), and finally pay (customer conversion rate).

If you only measure conversions, you don't understand why they happened and what to improve to make them happen even more.

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