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Business Models for Startups


Business models startups can use and examples of big companies and startups applying the various models. Plus some do's and don'ts

Business models startups can use and examples of big companies and startups applying the various models. Plus some do's and don'ts

Published in Technology , Business
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  • 1. “ Boulevard of Broken Dreams” - But you’re not alone... April 2009 [email_address] twitter: @seedcamp
  • 2. Business Models for Startups
    • Think through a biz model early on; Don’t just build and worry about survival
    • 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)
  • 3. 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
  • 4. Advertising
    • Everyone
    There’s a lot of noise. Isn’t so dissimilar to the physical world Don’t rely solely on advertising
  • 5. 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)
  • 6. Freemium Skype, Flickr, 37Signals, iMall, Freetailer, Freeservers Basekit,, Zemanta Pro Model: Offer basic services for free (features, use), drive users, and charge a premium for truly advanced features
  • 7. Subscription Model: Straight charge for use of service. Can have promotional offers Salesforce, Amazon EC2, Gartner Slicehost (actually, fewer startups starting with a straight subscription model)
  • 8. Marketplace & eCommerce Build a great marketplace and they will pay Or make and sell something people want
  • 9. 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
  • 10. 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,, NetSuite Startups: Toksta, Stupeflix
  • 11. Virtual Goods
    • Model: Selling virtual gifts, furniture, in-game upgrades like weapons, online currency, etc
    Changeyou, Tencent, Second Life, Habbo Hotel Stardoll, Kyko, HotorNot
  • 12. 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
  • 13. Good Blogs/Resources