hi guys this is a manifold user (@realDonaldTrump) letting you know you left this as public edit access. can i have a tip for pointing this out?
aka “Project Moneyfold”. Status: in discussion
Core Questions
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Where are Manifold’s strengths?
- Prediction markets attract users who are disproportionately smart, rich, and influential. (The list of famous founders, writers, VCs, etc who pay attention to Manifold is frankly insane for a company of our team & userbase size.)
- Our product demonstrates quite good retention among our existing users, due to a combination of “people like being proven right” and a high-quality community
- Our prediction markets can have a high virality factor, blowing up during particular news cycles (eg LK99, Sam Altman ouster, etc)
- Our core team is pretty good at shipping polished consumer websites, quickly
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Where are Manifold’s weaknesses?
- Our total userbase size, new user acquisition & ND1 retention are subpar for a traditional B2C product
- Prediction markets don’t take hold among 90% of potential users, due to complexity and the “gambling” stigma
- [s] I don’t think gambling stigma is a primary reason, at least for ND1.
- Prediction markets generally have long feedback loops, esp compared to other products in the reference class of “games”
- [s] +1, this is an important insight
- We trade in play money, which limits how much individuals are willing to financially invest into their Manifold balance
- Our markets typically have low decision-relevance and are difficult to set up well, which limits how much value companies and individuals can get out of them
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Who pays for Manifold? Why?
- Existing users who enjoy the game of trading on Manifold?
- People who want information derived from our prediction markets?
- Other parties who want access to Manifold’s users (ads? jobs? dates?)
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How much additional work are we willing to put in on “monetization” right now?
- How much does monetization (or dev cycles on it) trade off against growth?
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Is mana recognized as revenue at time of purchase? Or on consumption?
Mana purchases aren’t revenue
- [A] Mana purchases aren’t revenue — or at least an accounting firm would not think so. At purchase time, we incur a liability to our user (they can use their mana to do stuff on our platform). See Patrick McKenzie on how accounting is done for video game purchases.
- Implication: to successfully monetize via mana, we need to develop mana sinks that are compelling for our users.
- Implication: printing mana & mana inflation should be treated as a cost center for Manifold the company
- [s] this is part of a long-standing disagreement. one of the strengths of play-money is that we can treat mana sales as revenue.
- real money > play money > semi-real/semi-fake money with unclear legal status and obligations
Austin’s theses
- Approximately: Total revenue to Manifold = (# users) * (value per user) * (revenue captured / total value)
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users - we’ve pushed hardest on growing this number, with modest success; but as Manifold is currently implemented, Austin is skeptical of another eg 10x growth in usage
- value per user - this is where Austin’s most excited. We have a relationship with an extremely valuable audience, so if we can figure out how to deliver them things they want, we can charge much more for it
- fraction of captured revenue - to date, we’ve gone in the direction of capturing as little of the value as possible (eg no trading fees, bonuses to creators, etc). We probably want to notch this up a little bit (but not too much, as it trades off against growing 1., which feeds into our network effects)
- We should lean into a monetization strategy that capitalizes on Manifold’s core strengths, instead of just copying whatever well-known companies do to make money.
- So I’m more pessimistic on eg cosmetics, which are low $ per user and require very large userbases
- [s] makes sense, unless the features are trivial to implement
Discussion January 9, 2024:
What playbook do we follow for making money?