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 Subject: Formula/equation to build our business growth projections (\$50) Category: Science > Math Asked by: oldblues-ga List Price: \$50.00 Posted: 22 Aug 2006 20:51 PDT Expires: 21 Sep 2006 20:51 PDT Question ID: 758610
 ```Our yet-to-be-launched product makes use of the network effect in that it will only be useful to someone if you invite other people to use it with you. I'm looking for a relatively simple way to derive the impact of one person (user A) joining the network over several time periods. The key variables in this equation seem to be a) Number of people user A invites to join the network (invitees) b) The number of time periods that pass before each invitee joins the network c) The % of invitees that subsequently invite more people. d) The number of people subsequently invited by the invitees (subsequent invitees) e) The number of time periods that pass before these subsequent invitees join the network f) The churn rate of a user in the network. We will assume that this will be the same for all users. g) The invitee acceptance rate. We will assume that this rate is the same for all invitees I'm not sure what time period I'll use for this - either months or quarters. Thanks !``` There is no answer at this time. Subject: Re: Formula/equation to build our business growth projections (\$50) From: ansel001-ga on 23 Aug 2006 02:22 PDT
 `Sounds a lot like multi-level marketing.`
 Subject: Re: Formula/equation to build our business growth projections (\$50) From: herkdrvr-ga on 23 Aug 2006 06:26 PDT
 ```You are trying to determine the impact of one user joining, yet this is completely dependent upon the other variables. Perhaps you should approach the problem from the other direction. In other words, quantify how you will define success, and you'll be able to work your problem backwards. For instance, success is defined as: Invitee acceptance rate of 75%. Churn rate of 5%. Profit margin of 20%. Minimum sales of \$10,000 / month. Now you'll know exactly how many people need to subscribe in a month, how many they'll have to invite given an acceptance rate of (whatever you decide), how many more they'll have to invite given a churn rate of (whatever you decide) and what you'll have to charge for a profit of (whatever you decide.) I hope that was as clear as mud. Regards, Herkdrvr```
 Subject: Re: Formula/equation to build our business growth projections (\$50) From: oldblues-ga on 23 Aug 2006 08:45 PDT
 ```thanks - I am happy to plug in the different variables such as acceptance rate %, etc. What I'm hoping to have built is the equation into which I can plug in different assumptions```
 Subject: Re: Formula/equation to build our business growth projections (\$50) From: herkdrvr-ga on 23 Aug 2006 14:58 PDT
 ```I've got your equation. It's x+y+z. See...variables are meaningless unless *you* provide some values. Equations need to be set equal to something...you'll need to provide more information is the bottom line. Respectfully, Herkdrvr```
 Subject: Re: Formula/equation to build our business growth projections (\$50) From: oldblues-ga on 25 Aug 2006 08:14 PDT
 `thanks - I got the equation I needed from Yahoo! Answers` 