Every company has an equation. At a simple level, we think of it as Growth * Engagement * Monetization = Revenue.
Yesterday in our chat, we made a soft decision to start focusing on 1-on-1 video chatting over a news feed product. In this case, we would think of the equation generally as one of the below:
DAU * (Video calls / DAU) * ($ / Video call) = RevenueDAU * (Avatars used / DAU) * ($ / Avatar used) = RevenueThe specifics mostly depend on which monetization model you go with as well as how you define a productive engagement.
Virtu's key focuses over the next months should be validating, answering, and maximizing the components of the equation:
1. Monetization: How can we get users to pay? (current content creators? video chat users? pay per avatar? freemium? subscription? NFTs?)
2. Growth: Can we better retain non-creators? If we built features specifically for them, would reality reflect our predictions? (e.g. We believe that current retention is very low because there are no great experiences for non-viewers. We hypothesize that building a better feed, as well as an engaging video chat experience, will greatly raise retention.)
3. How do we define good engagement? (This depends greatly on where the product ends up going. For the feed product, it might be: can we get creators to create x y z types of content? and have viewers be entertained, and eventually convert into creators? For video chat, it might be how frequently & long they call on their own will.)