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Revenue models in 15 minutes

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Speed date your revenue models! …

Speed date your revenue models!

Come Saturday 2 June 2012, Futurebooks will review revenue models from 15 finalists, from the Ideas Inc Business Challenge.

Each team will have 5 minutes to pitch the revenue model they love most, and show us the money. Put aside your product and focus on how your business makes #cash.

Excite us by matching the revenue model and numbers.

http://futurebooks.com.sg/blog/revenue-in-15-minutes-with-ideas-inc/3741

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  • 1. Prepared for Ideas Inc,Nanyang TechnologicalUniversity.As of June 2012.REVENUE IN15 MINUTES
  • 2. STAY INTOUCH Email us at inquiry@futurebooks.com.sg or visit www.futurebooks.com.sg @futureb00kswww.futurebooks.com.sg
  • 3. TWITTER –A SPECIALCASE
  • 4. THEY HAVENO REVENUEwww.futurebooks.com.sg
  • 5. POSSIBLE REVENUEMODELS Advertising SMS sent to twitter Pay-per-tweetwww.futurebooks.com.sg
  • 6. WHAT ITTAKES TOMAKEREVENUE
  • 7. ANSWER THEFUNDAMENTALS Pain point Value proposition Revenue modelhttp://futurebooks.com.sg/blog/writing-business-plans-that-speak-to-investors/2308www.futurebooks.com.sg
  • 8. REVENUE MODELINNOVATION T diti l t ti h Traditional segmentation has historically relied on geography or broad demographic traits to segment Saul Berman, Not for Free: Revenue Strategies customers. for a New World Behavioral segmentation looks to the custo e customer to see how t ey use the o they t e product, on what platforms or through what channels, how are they paying for it etc. etcwww.futurebooks.com.sg
  • 9. SOLVE SIGNIFICANTPAIN POINTS Create pain killers, not vitaminswww.futurebooks.com.sg
  • 10. WHO WILLPAY FOR IT? End users / buyers Sellers Advertisers or sponsors The end user doesn’t always pick up the bill. Govt subsidies (medical reliefs etc)www.futurebooks.com.sg
  • 11. WHAT EFFECTDOES PRICE HAVE? Inelastic Elastic demand demand $ $ demand demand P2 P2 P1 P1 Q2 Q1 Qty Q2 Q1 Qtywww.futurebooks.com.sg
  • 12. WHEN DO WE MAKE REVENUE? Follow on product, existing market New product, new market Revenue Revenue lag lagRevenue Revenue Time Time Rate of revenue Rate of revenue making (cash) making (accrual) www.futurebooks.com.sg
  • 13. WHAT HAPPENS IF WEDON’T MAKE REVENUE?www.futurebooks.com.sg
  • 14. ANTICIPATE NOTMAKING REVENUE Change product Change revenue model Change sales processwww.futurebooks.com.sg
  • 15. DEFINE NEW ANDEXISTING CUSTOMERS Customer acquisition Customer retention q g Cost of acquiring g Cost of maintaining Cost of conversion Life-time value from free to paid Upsell An existing customer is 3 times more profitablewww.futurebooks.com.sg
  • 16. EXAMPLEREVENUEMODELS
  • 17. PRODUCT SALESREVENUE MODELS Model Description Example Clicks and bricks Traditional location-based retail, combined with Wal-Mart (eg) internet + mobile. After-sales Profit from recurring servicing, post sale. Mercedes service Franchise Franchise fees and sometimes product sales. Subway License Leverage existing sales channel to sell products. Adobe Group-buying Improve purchase power of consumers Groupon Rental / leasing Differentiate through service Hertz Govt subsidy Product is made free, or subsidised by Govt. Pharma Consulting Design specialised products for other manufacturers ARMwww.futurebooks.com.sg
  • 18. INTERNET REVENUEMODELS Model Description Example Advertising Cost-per-click, Cost-per-impression, cost-per- Google AdSense acquisition, affiliate marketing E-commerce Compete with traditional retails using range and price Amazon.com Transaction fee Utilities which facilitate commerce and take a PayPal commission. It is pay-per-use. Software-as-a- Subscription model with recurring billing Salesforce.com service Third party Service is free to the direct user, paid for by a third Mint.com sponsorship party sponsorship Donation Users decide what the product or service is worth Wikipediawww.futurebooks.com.sg
  • 19. GAME REVENUEMODELS Model Description Example Virtual goods Buy functional, decorative, in-game items Nexon Subscription S b i i Basic product i f i d is free, b add-ons are additional but dd ddi i l Zynga tiers Advertising Serving contextual ads to gamers Electronic Arts Land use fees Virtual land is sold leased to individuals Second Life Merchandise Purchase physical goods to activate a online Webkinz toys membership Event fees Differentiated experience Netamin s Netaminswww.futurebooks.com.sg
  • 20. SIMPLISTICVIEW ON HOWTO MAKE$250K INREVENUE
  • 21. PRODUCTSALES Total revenue Sale price Sales p per month $250,000 $100 2,500 units Total expense COGS Distribution R+D per month $187,500 $187 500 $30 $20 $25www.futurebooks.com.sg
  • 22. ADVERTISINGFEES / MNTH Total revenue RPM* Page visits Pages** p per month $250,000 $2 175,000 30,000 Total expense Editors Cost per editor Pages each per month $ , $75,000 100 2,500 , 30 *Revenue per thousand visits including CPC, CPM and CPA ** Singapore’s top sites receive XYZ per month (Source: Alexa)www.futurebooks.com.sg
  • 23. FREEMIUM +PREMIUM Total revenue Premium Premium fee / p per month customers mnth $250,000 20,000 $25 Total expense Marketing to Other costs per month get customer $75,000 50,000 25,000www.futurebooks.com.sg
  • 24. WHAT VCsWANT
  • 25. CLEAR FINANCIALASSUMPTIONS Clearly state on page on of the business plan 4 key financial assumptions which underpin the entire business plan. d i th ti b i lwww.futurebooks.com.sg
  • 26. SCALABILITY Calculate the cost and revenue of adding one addition customer. Rethink products and services if necessary. d iwww.futurebooks.com.sg
  • 27. TRUE PICTURE Plan for victory, but prepare for setbacks. Underestimate revenue, and overestimate costs. twww.futurebooks.com.sg
  • 28. http://freetoplay.biz/2007/08/02/top-10-revenue-models-for-free-to-play-games/ http://www.slideshare.net/JeremyGislason/how-to-increase-membership-sales-using- different-revenue-models-presentationCREDITS http://www.slideshare.net/rashmi/scaling-revenue-rashmi http://www.sixteenventures.com/7-SaaS-Revenue-Streams-with-Details.pdf http://www.fastcompany.com/1740192/revenue-model-innovation-how-to-generate-sales- in-a-world-of-free in a world of free http://bohknet.tm.tue.nl/OHKNET/section31/rm.html http://www.1000ventures.com/business_guide/revenue_model.html
  • 29. TERMS OF USERestrictions on Use of Contents 4. Any request to otherwise reproduce the Contents from this y q p1. Except as otherwise provided, the Contents of this Web Site for publication or commercial use should beDocument shall not be reproduced, republished, uploaded, addressed to: info@futurebooks.com.sg.posted, transmitted or otherwise distributed in any way, Disclaimer of Warranties and Liabilitywithout the prior permission of FUTUREBOOKS PTE LTD. To use 5. The Contents of this Document are provided on an “as is”any parts of the Contents of this Document, the user must seek basis without warranties of any kind. To the fullest extentpermission in writing, stating the c Contents for use; intent of permitted by law, FUTUREBOOKS PTE LTD does not warrantuse; manner of use; time frame of use and identity of the user. and hereby disclaims any warranty:FUTUREBOOKS PTE LTD reserves the right to refuse permission (a) as to the accuracy, correctness, reliability, timeliness, non-without declaring reason(s); and/or if information submitted by infringement, title, merchantability or fitness for any particularuser is deemed insufficient. purpose of the Contents of this Document;2. You may view, download and print the Contents if: (b) that the Contents available through this Document or any(a) the Contents are used for non-commercial or personal use functions associated therewith will be uninterrupted or error-only and will not be copied or posted on any network free, or that defects will be corrected or that this Documentcomputer or broadcast in any media, and media and the server is and will be free of all viruses and/or other(b) no alterations, additions or modifications of the Contents harmful elements.are made in any way 6. FUTUREBOOKS PTE LTD shall also not be liable for any(c) due acknowledgement is given to “FUTUREBOOKS PTE LTD” damage or loss of any kind caused as a result (direct or indirect)and citing the sources for the relevant data extracted. of the use of the Document, including but not limited to any3. Modification of any of the Contents or use of the Contents damage or loss suffered as a result of reliance on the Contentsfor any other purpose will be a violation of FUTUREBOOKS PTE y p p contained in or available from the Document.LTD ‘s copyright and other intellectual property rights.Graphics and images on this Document are protected bycopyright and may not be reproduced or appropriated in anymanner without written permission of FUTUREBOOKS PTE LTD. www.futurebooks.com.sg

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