Business Models for the Web - Find Your Best Fit October 16th 2009 [email_address] twitter: @seedcamp

Business Models for Startups Think through a biz model early on; Don’t just build and worry about survival You don’t need to deploy it at the beginning but it’s a helpful exercise to figure out how you’ll make money Also helps you figure out what about your product would be valuable for a user and potentially avoid build mistakes Lots of ways to sell valuable services. Find your ‘Best Fit’ The devil is in the details and secret to success in the execution – talk to other startups and learn from each other Seedcamp companies Of the 11 (13) startups; Mobclix (mobile ad-network), Kublax (freemium?), Basekit, Zemanta, Soup, Ubervu (Freemium), RMO (Subscription), myBuilder (marketplace), Kyko (Virtual goods), Toksta, Stupeflix (License)

Think through a biz model early on; Don’t just build and worry about survival

You don’t need to deploy it at the beginning but it’s a helpful exercise to figure out how you’ll make money

Also helps you figure out what about your product would be valuable for a user and potentially avoid build mistakes

Lots of ways to sell valuable services. Find your ‘Best Fit’

The devil is in the details and secret to success in the execution – talk to other startups and learn from each other

Seedcamp companies

Of the 11 (13) startups; Mobclix (mobile ad-network), Kublax (freemium?), Basekit, Zemanta, Soup, Ubervu (Freemium), RMO (Subscription), myBuilder (marketplace), Kyko (Virtual goods), Toksta, Stupeflix (License)

Business Models for Startups A flavor of the popular and successful few: Advertising Freemium and Subscription Marketplaces and eCommerce License and SaaS Virtual Goods Graduated Business Models

A flavor of the popular and successful few:

Advertising

Freemium and Subscription

Marketplaces and eCommerce

License and SaaS

Virtual Goods

Graduated Business Models

Advertising Everyone There’s a lot of noise. Isn’t so dissimilar to the physical world Don’t rely solely on advertising

Everyone

You have to pedal twice as fast to go the same distance data thanks to Advertising as a supporting Revenue stream; Blend with complementary models Look at verticals, lead generation , affiliate programs (eBay, Amazon), Mobclix (ad network + analytics subscription) Expedia (Marketplace), Business Week and NYT (Offline one-off and subscriptions) Startup examples – Zoombu (lead gen), Simply Hired (job seekers), Zemanta (Amazon affiliate)

Advertising as a supporting Revenue stream; Blend with complementary models

Look at verticals, lead generation , affiliate programs (eBay, Amazon), Mobclix (ad network + analytics subscription)

Freemium Skype, Flickr, 37Signals, iMall, Freetailer, Freeservers Basekit, Box.net, Zemanta Pro, Kwaga Model: Offer basic services for free (features, use), drive users, and charge a premium for truly advanced features

Subscription Model: Straight charge for use of service. Can have promotional offers Salesforce, Amazon EC2, Gartner Slicehost, Erply (actually, fewer startups starting with a straight subscription model)

Marketplace & eCommerce Build a great marketplace and they will pay Or make and sell something people want

Marketplace and eCommerce Model: Mktplace - % of success fee, listing fee, subscription eCommerce - Acting as the merchant itself or agency There is a LOT of CONSISTENT Revenue to be made here Expedia (Merchant model),Net-a-porter, Zappos myBuilder, Rent Mine Online

Model:

Mktplace - % of success fee, listing fee, subscription

eCommerce - Acting as the merchant itself or agency

There is a LOT of CONSISTENT Revenue to be made here

Licensing and SaaS Model: License underlying technology or offering software as a service to customers SMEs – Distribution (Channel, channel, channel) Corporates – longer sales cycles, customization Big company: Livebookings, Meebo, Magnify.net, NetSuite Startups: Toksta, Stupeflix, Codility

Model: License underlying technology or offering software as a service to customers

SMEs – Distribution (Channel, channel, channel)

Corporates – longer sales cycles, customization

Virtual Goods Model: Selling virtual gifts, furniture, in-game upgrades like weapons, online currency, etc Changeyou, Tencent, Second Life, Habbo Hotel Stardoll, Kyko, HotorNot, Platogo

Model: Selling virtual gifts, furniture, in-game upgrades like weapons, online currency, etc

Graduated Business Models Blended business models that add further relevant revenue streams myBuilder – going from % of transaction to subscription to advertising/lead-gen Amazon – E-commerce to hosting to affiliate advertising Other models: Micropayments, Third party support models Consulting = NOT a business model b/c it’s not your core activity

Blended business models that add further relevant revenue streams

myBuilder – going from % of transaction to subscription to advertising/lead-gen

Amazon – E-commerce to hosting to affiliate advertising

Other models: Micropayments, Third party support models

Consulting = NOT a business model b/c it’s not your core activity

Good Blogs/Resources http://biztools.pbworks.com http://startup-marketing.com/the-right-business-model-for-your-startup/ http://omalleyblog.typepad.com/infectious/2009/02/ad-based-startups-bad-idea.html http://500hats.typepad.com/500blogs/2008/09/startup-metrics.html http://www.avc.com/a_vc/2006/03/my_favorite_bus.html http://www.techcrunch.com/2007/06/20/virtual-goods-the-next-big-business-model/

http://biztools.pbworks.com

http://startup-marketing.com/the-right-business-model-for-your-startup/

http://omalleyblog.typepad.com/infectious/2009/02/ad-based-startups-bad-idea.html

http://500hats.typepad.com/500blogs/2008/09/startup-metrics.html

http://www.avc.com/a_vc/2006/03/my_favorite_bus.html

http://www.techcrunch.com/2007/06/20/virtual-goods-the-next-big-business-model/