Trying something new: posting my Quora answers to my blog through the new Wordpress integration... Question: If you are an investor for an early stage company, do you place more value on 1MM unique visitor or the ability to convert at 5%+ but only 1000 customers? My answer: Ryan Spoon, Investor: Polaris Venture Partners
Very much agree with Keith Rabois' answer... with a slight twist: those 1,000,000 users need to have some 'conversion' metric of their own. That does not need to be upgrade / purchase rate; instead, it could mean engagement of some sort (usage, return, etc). It needs to show that the audience is active and lasting.
For most properties, it is easier to optimize for conversion than it is to optimize for growth. Reaching 5% conversion rate is promising but not necessarily extraordinary. Reaching 1,000,000 uniques (or more impressively: users) distinguishes yourself as a major audience.