This morning, I came across this post by Seth Godin. In the post Seth outlines six questions to ask for analyzing a website.
The questions he says to ask are:
1. What’s the revenue per visit? (RPM)
2. What’s the cost of getting a visit?
3. Is there a viral co-efficient?
4. What’s the cost of a visitor?
5. Are there members/users?
6. What’s the permission base and how is it changing?
Seth encourages those wanting to create a “perpetual machine of profit” to take some time and research before diving into the project. He even suggests going to work for a company who has successfully created a website that generates profit.
He closes his post with this last thought:
The ideal structure is a business that’s a platform, not merely a place to stop by. Once people move in and become members, they’re hesitant to leave, they share permission over time, they tell their friends, their RPM goes up and the cost of acquiring and hosting members goes down.