Peter Thiel’s CS183: Startup - Class 9 Notes Essay

http://blakemasters.tumblr.com/post/22405055017/peter-thiels-cs183-startup-class-9-notes-essay

by aaronbrethorst • 14 years ago

89 31 14 years ago

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n_coats• 14 years ago

Interesting piece.. Calculating LTV and user acquisition costs reminds of the Harvard Business Case Study that examines how Virgin Mobile was able to compete in the US with existing mobile companies by reducing their customer acquisition costs. Here's the case study, feel free to apply info from this post towards coming up with the numbers and solution.

http://www.docstoc.com/docs/24724434/Virgin-mobile-USA---pri...

kiba3• 14 years ago

How do Peter Thiel knows about this stuff and how do I know if it's true?

pbreit3• 14 years ago

How do you know anything is true? What would satisfy you in regards to Thiel's presentation? That he was a top student at Stanford? That he founded PayPal? That he was the first outside investor in Facebook? That he invested in distribution monsters like Yammer, Stripe and Zynga? That he's a chess master? That respectable people think he's smart? What would satisfy you?

gwern• 14 years ago

Respectable smart people differ on lots of things - or do all top students at Stanford agree with Thiel? Do all chess masters agree with him? All investors? (And investment is such a random thing anyway...)

kiba3• 14 years ago

His investment track record is relevant, but that only tell part of a story. I'll also need to know the other side, his failure.

His education, the fact that he is a chessmaster, and that respectable people think he's smart is irrelevant. There's ton of smart people like him but they're not going to be wise in investment and strategy.

rudiger• 14 years ago

What would satisfy me is empirical evidence justifying the claims.

paulsutter• 14 years ago

Perhaps the best class yet. Fantastic. But one comment:

> Google was the first company that enabled people to figure out whether advertising actually worked.

Not quite. You know those late night TV commercials for ginsu knives? They've always used a different phone number on each channel so that they know which ad worked. Billboards for lawyers? Same deal.

Google didn't invent performance marketing.

bgilroy26• 14 years ago

> Google didn't invent performance marketing.

They brought it to the masses

codemac• 14 years ago

... because the masses don't watch TV? Which masses are you talking about?

sixQuarks• 14 years ago

Performance based advertising was perfected as early as the 1850s. Newspaper advertisements would use coupons that were redeemed at stores, then given to the advertiser so the stores could be reimbursed.

gallerytungsten• 14 years ago

This is a good article for "big picture" thinking about how to grow a company. Lots of people get hung up on their specialty, and overly aggrandize their importance, instead of seeing the larger concepts. This is an article that helps bridge those conceptual gaps.

pmarca• 14 years ago

This is an extraordinary overview for any entrepreneur thinking about how to put together a business plan that will appeal to us at AH -- fantastic!

mukaiji2• 14 years ago

Marc Andreessen from AH is on HN. #awesome.

stevenj• 14 years ago

I've read every one of these so far. They've all been great!

Blake, if you're on HN, just wanted to say thanks!

(If these were converted into an ebook or paperback, I'd eagerly buy it.)

bgmasters2• 14 years ago

My pleasure! We're figuring out what to do in terms of wrapping them up in an ebook.

mukaiji2• 14 years ago

hey do you think Peter will get upset if we post the lecture slides for other HN readers to see?

barmstrong• 14 years ago

Totally agree - this material is better than 95% of business books I've read and I think could be a best seller (certainly in terms of quality, not sure about marketing/promoting it). Maybe you could co-author it with Peter.

abhaga• 14 years ago

My biggest takeaway from the essay:

> So it’s worth thinking really hard about finding the single best distribution channel.

When thinking about the distribution, I always think about all the possible things we can do and try to do at least 3-4 top ones. The mistake is not to quickly zero down on the one with highest RoI and put all the energies on that one.

nodemaker• 14 years ago

In the context of viral marketing, does anyone know how they came up with this formula?

Custs(t) = Custs(0) * (K ^ (t/ct +1) - 1) / (K-1)

where Custs(t) -> Number of customers at time t, K -> viral coefficient, and ct -> cycle time

EDIT : Okay I get it.

Basically the number of cycles that have occured at time t equals (t/ct+1)

ntoshev• 14 years ago

So, how did Intuit manage to sell their product? What is their distribution strategy?

aaronjg• 14 years ago

Somewhat minor point, but I take issue with the CLV calculations. Using average retention rates can significantly undervalue your customers [1].

[1] http://blog.custora.com/2011/08/why-average-retention-rates-...

MaxGabriel• 14 years ago

I'm curious what the course has been like. To someone in it, do you do assignments or anything?

Peter Thiel’s CS183: Startup - Class 9 Notes Essay

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